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3 1223 03273 6663 


San Francisco Public Library 

(ioveiD'ii'c'Mi ;,^.H,a!ion Center 
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I 100 Lark'm Street, 5tti Floor 
San Francisco, C A 94102 


Not to be taken from the Library 






MAR 2 7 1997 






ROOM 113 


MONDAY, MARCH 17, 1997 
2:10 P.M. 





ROOM 113 


MONDAY, MARCH 17, 1997 
2:10 P.M. 

Reported by 

Evelyn J. Mizak 
Shorthand Reporter 

3 1223 03273 6663 











9 GREG SCHMIDT, Executive Officer 

10 PAT WEBB, Committee Secretary 

11 NANCY MICHEL, Consultant on Governor's Appointments 


Industrial Welfare Commission 




16 California Chamber of Commerce 

California Federation of Labor, AFL-CIO 


MARVIN ARMAS, President 

19 Kern, Inyo, and Mono Counties Central Labor Council 

20 MATT McKINNON, Secretary-Treasurer 
California Conference of Machinists 



22 United Food and Commercial Workers 
Amalgamated Transit Union 

23 Engineers and Scientists of California 

California Unemployment Insurance Appeals Board 





4 49383 SFPL: ECONO JRS 
75 SFPL 06/06/03 2 


Proceedings 1 

Governor's Appointees; 


Industrial Welfare Commission 1 

Background and Experience 1 

Introduction and Support by 


Witness in Support: 


California Chamber of Commerce 3 

Witnesses in Opposition: 


California Labor Federation, AFL-CIO 4 

Questions by SENATOR LEWIS re: 

Replacing Mandated Daily Overtime 

with Federal Standards 6 

Effect on Labor Union Contracts 7 

Questions by SENATOR BRULTE re: 

Clarification of Previous 

Statement regarding Vote to 

Eliminate Daily Overtime 8 

Vote of Employees 8 

Questions by SENATOR LEWIS re: 

Why the Two-thirds Threshold 9 

Questions by SENATOR BRULTE re: 

IWC ' s Adoption of Federal Law 9 

No Problem with Two-thirds 

Vote of Employees 10 

Current Threshold Needed to Approve 

Union Contract 10 

Questions by SENATOR AYALA re: 

Interpretation of IWC ' s Mission 11 

Support for Minimum Wage 12 

Questions by SENATOR HUGHES re: 

Cutting out Senior Citizen Discounts 

at Appointee ' s Restaurants 13 

Saddened by Lack of Senior Citizen 

Discounts 14 

Achievements in Past Five Weeks to 

Promote Mission of IWC 16 

Questions of MR. RANKIN by SENATOR BRULTE re: 

IWC Vote was to Take Testimony and Have 

a Study, or to Eliminate 8 -hour Work Day 16 

Further Witnesses in Opposition: 

MARVIN ARMAS, President 

Kern, Inyo and Mono Counties Central 

Labor Council 18 

Questions by SENATOR BRULTE re: 

Number of Members Affected by 

IWC • s Ruling 19 

How Do Nonunion Workers Get 

Flexible Work Weeks 19 

Questions by SENATOR LEWIS re: 

Reasons for Criticism that Appointee 

Was not Open to Compromise 20 

Response by MS . ARNOLD 22 

MATT McKINNON, Secretary-Treasurer 

California Conference of Machinists 23 


United Food and Commercial Workers 

Amalgamated Transit Union 

Engineers and Scientists of California 26 

Closing Statement by Appointee 29 




Governor ' s Withdrawal of Nomination 49 

1 Request by CHAIRMAN LOCKYER to Withhold Action 

on Confirmation until Return of Chair 31 




4 California Unemployment Insurance Appeals Board 31 

5 Background and Experience 32 

6 Questions by SENATOR HUGHES re: 

7 Position on Efforts to Raise 

Unemployment Insurance Benefits 34 

Questions by CHAIRMAN LOCKYER re: 

Closing of Offices 35 

Number of Consolidation Hearing 

Facilities 36 

12 Oakland Office 37 

13 Use of Appeal Forms 40 

14 Other Sources of Personal Income 42 

15 Questions by SENATOR BRULTE re: 

16 Employment of Wife by SENATOR LESLIE 43 

17 Questions by SENATOR AYALA re: 

18 Recent Appointment of Executive Director 44 

19 Rising Caseloads and Fewer Offices 46 

20 Appeals Handled by Phone 46 

21 Change in Chain of Command at Board 47 

22 Statement by CHAIRMAN LOCKYER of Positive 
Recommendation from SENATOR DAVID ROBERTI 47 



Motion to Confirm 47 

Committee Action 48 

Termination of Proceedings 49 

Certificate of Reporter 50 

- P-R-0-C-E-E-D-I-N-G-S 
— ooOoo — 

CHAIRMAN LOCKYER: Item two, Carolyn Arnold, 
member of the Industrial Welfare Commission. 

Good afternoon. 

MS. ARNOLD: Good afternoon, Mr. Chairman, 
honorable Members of the Commission. 

CHAIRMAN LOCKYER: Did you want to start with any 
kind of comment? Sometimes people do; sometimes they don't. 
It's up to you. 

MS. ARNOLD: Why don't I keep it extremely brief. 
You've already had a long afternoon, and just kind of introduce 
myself to you, and let you know what I've done. 

My name is Carolyn Arnold; everyone calls me 
Terry. I'm 54 years old. I started working when I was 14 years 

I was a registered nurse until 1981, when my 
husband and I went to Bakersfield and bought four Burger King 
restaurants, built them up to fifteen, split assets with our 
partners. We currently own sixteen restaurants. 

After that, I am just open to any questions from 

CHAIRMAN LOCKYER: Maybe just ask for some 
testimony for a bit and let Members focus on their materials. 

ASSEMBLYMAN ASHBURN: Mr. Chairman, Members, I'm 
Assemblyman Roy Ashburn from the 32nd District, which includes 

I was going to say that I knew a lot about Terry 

Arnold until I looked at your agenda today and realized that 
this is Carolyn P. Arnold that is before you. I've known — 

CHAIRMAN LOCKYER: She changed her name. 

ASSEMBLYMAN ASHBURN: Apparently so, and I wasn't 

I've had the privilege of knowing Terry Arnold 
for a long time. She was a very frequent visitor to the Board 
of Supervisors in Kern County and is an outstanding individual. 

I come here today simply to lend support to her 
confirmation to this important board. She is a very astute 
business person. T^d I think when you take a look at the person 
that is before you, and not so much one particular issue that 
may be pending or generating more interest than others, you will 
find that this is a person who worked her way up, as they say, 
the hard way, who worked hard, and who now has a business of 300 
employees, and has operated that business for the past 16 
years, and I would say has great respect from her employees. 

I wish that the employees were here to speak on 
her behalf, because I think they would tell you the true story 
of Terry Arnold. 

Also, Terry has a very unique ability to express 
herself, and to give clarity to issues. I have known her to be 
very, very fair, and very clear in the way in which she 
considers matters and renders her position and decision. 

And it seems to me altogether fitting that on 
this day, when the Capitol pauses to honor outstanding women, 
this is the day in which we honor outstanding women throughout 
California, that you have before you for confirmation a truly 

outstanding woman. 

I would ask for your favorable consideration of 
her confirmation to the Industrial Welfare Commission. 

Thank you, Mr. Chairman. 

CHAIRMAN LOCKYER: Thank you. Assemblyman. 

Are there others present who would wish to 
comment on behalf of Ms. Arnold. 

MS. BROYLES: Good afternoon, Mr. Chairman, 
Members of the Committee. 

I'm Julianne Broyles from the California Chamber 
of Commerce. 

We do strongly support Carolyn's confirmation as 
an employer member to the Industrial Welfare Commission. She's 
a capable and energetic woman that I've had the pleasure of 
working with over the last few years on a variety of issues. I 
think she's admirably suited to fill the employer position. 

She has pointed out when she was speaking before 
that she has managed to balance both. She spent 16 years as an 
employer and 17 years as an employee, and I feel it would help 
her bring the balance that we require of our members on the 
Industrial Welfare Commission if she is actually confirmed by 
this Committee. 

We hope the Committee will let her serve. She's 
only served five weeks prior to being called up for her 
confirmation today, her confirmation hearing. 

Her only vote that she's actually cast has been 
to narrow the choices on what direction overtime reform is taken 
by the Industrial Welfare Commission. 

Again, the Chamber does strongly support her 
confirmation and hope you'll give her your favorable 

Thank you. 


Is there anyone else that wishes to comment in 
support of the confirmation question. 

I guess it's appropriate to take some opposition 
testimony now, and let them talk a little before we have any 
questions . 

If Members want to interrupt with questions, I 
don't want to cut you off. 

MR. RANKIN: Good afternoon. Tom Rankin, 
representing the California Labor Federation. 

We're dealing here with a confirmation to what I 
would characterize as a failed commission. The IWC is given the 
duty under statute, it's even mentioned in the Constitution, of 
protecting the workers of California. 

It's failed to fulfill its duty. It avoided 
raising the minimum wage for nine years, until the federal law 
and Proposition 210 forced an increase. 

Instead, it's spent a large part of its time 
attacking overtime pay provisions. It's become, I guess you 
could say, overly political while it's forgotten its purpose. 

I would argue that the current appointee in a lot 
of ways personifies these problems with the IWC. At her first 
meeting, without hearing any of the testimony which the IWC had 
collected on the issue of daily overtime, she voted yes on a 

proposal by the Chair of the Commission to totally eliminate 
daily overtime in the State of California. 

This happened — this vote was taken at the end 
of a long process which started, actually, when the Governor, in 
September of 1995, told the IWC that he wanted to eliminate 
daily overtime in the State of California. Whereupon, the 
employers responded with petitions to the IWC, saying that in 
five of the wage orders, covering approximately 8 million 
working people in the state, daily overtime should be 

Prior to this, the normal petition process of the 
IWC had not be taken advantage of by employers. So, it really 
basically was a political move in the first place. 

One of the statutory obligations of the IWC is to 
conduct studies on wages and working conditions of California's 
workers. It's supposed to, I would say from reading the 
statute, provide itself with independent data upon which it 
would base its decisions. And then, when it has the data, the 
criteria it's supposed to use to make its decisions on matters 
such as the one before it, daily overtime, is to decide whether 
or not the current regulation in this case would be prejudicial 
to the health and welfare of employees of the State of 

It took that vote without any collection of 
independent evidence. It took that vote without hearing any 
evidence from employers as to the economic impact of removing 
daily overtime from about 8 million — daily overtime 
protections from about 8 million workers. And it took that 

action in spite of considerable evidence from employee 
representatives as to the cost of this change to them, and as to 
the effect on their jobs and on the potential for losing their 
jobs because they couldn't get child care if they were forced to 
work 12 hours a day. This is a major issue to the workers of 
the California. 

And what the current appointee did is 
inexcusable. She voted to eliminate daily overtime without even 
hearing any of the evidence. 

I also understand that she is philosophically 
opposed to government intervention in wages. Now, how can 
someone who holds these views serve as a Commissioner of 
Industrial Welfare in the State of California when the 
Commissioners are required by law to protect the interests of 
the working people of the State of California? 

I would respectfully request that the 
confirmation be denied. 

SENATOR LEWIS: I have a question. 

Can you just give me a little background here? 
Now, she was a member of the Commission, and she voted to 
overturn mandated daily overtime. Was that to replace that with 
going to the federal system that's currently, I think, in 47 
different states? 

MR. RANKIN: She voted to eliminate daily 
overtime and to simply have overtime after 40 hours a week, 
which is FLSA standard, yes. 

SENATOR LEWIS: And that's the current law in 47 
other states? 

MR. RANKIN: Yes, and it overturns a law that's 
been — or rules that have been in effect in California since 
the early part of the century for women, and since 1980 for 
men. And in 1980, when that regulation on daily overtime was 
extended to men, what happened? Men started working fewer 
hours, but they made the same amount of pay. 

What will happen if this is eliminated in the 
State of California, at a time when we're putting hundreds of 
thousands of people into the labor market from the welfare rolls 
is, unemployment will go up. Because one of the functions of 
daily overtime and overtime regulations is to spread the work 
around. If you take away that disincentive from employers, they 
won't hire new people. They'll just keep people working longer 

That wasn't even considered by the Industrial 
Welfare Commission when it made its decision. 

SENATOR LEWIS: Despite her ruling, does that 
affect ongoing labor contracts? 

MR. RANKIN: Labor contracts — the way the 
Industrial Welfare Commission orders work is that employees who 
are affected in these five wage orders have the ability, by a 
two-thirds vote in all of those wage orders, to say we want a 
ten-hour day, four 10s; two-thirds vote of the employees. 

If there's an union contract, which is voted on 
when employees ratify it after it's negotiated, there's an 
exemption from the IWC orders on daily overtime. 

The principle is that employees have a choice. 
Either they vote through the IWC procedures, or they vote on the 


union contract. 

SENATOR BRULTE: Maybe you need to help me. Walk 
me through this again. 

First of all/ I want to make sure for the record, 
you didn't mean to say at the beginning she voted to eliminate 
daily overtime pay for all California workers, because that — 

MR. RANKIN: For about 8 million California 
workers who are covered by those five IWC orders. 

SENATOR BRULTE: And under no circumstances, 
then, would they be able to receive daily overtime pay? I want 
the record to just be reflective of that. 

MR. RANKIN: Under the proposal that she voted 
on, there would be no daily overtime for these employees. There 
would be overtime only after 40 hours in a week. 

In other words, an employee could be required by 
his or her employer to work 40 hours straight without overtime 

SENATOR BRULTE: Now under the IWC order, then, 
it allowed two-thirds — 

MR. RANKIN: The IWC orders have a voting 
procedure, and they all have a voting procedure, and they allow 
for at least employees to vote for four 10-hour days without 
daily overtime. 

SENATOR BRULTE: And the employees can vote for 

MR. RANKIN: The employees, by a two-thirds vote 
of the employees, they can decide that the employees in a 
certain work unit — and the way it works is, the employer gets 

the decide what the work unit is — and if those employees 
decide they want four 10s, they can have four 10s if two-thirds 
want it. 

SENATOR LEWIS: Why is there a two-thirds 
threshold? What's magical about the two-thirds? 

MR. RANKIN: Well, the IWC adopted that many 
years ago, and I think the basic idea was that they wanted to 
protect the workers, and to make sure — like you have a 
two-thirds vote on your budget here — that there was enough 
consensus among the workers before they went to a four 10s, 
because it could affect some people severely. 

If you are a single parent with a child, and 
can't find child care for more than eight hours a day, and 
suddenly your work schedule is changed to ten hours a day, you 
have a hard decision to make. 

SENATOR LEWIS: Conversely, if you're an employee 
that would prefer to work four ten-hour days, and your company 
won't allow you because of the mandated overtime, that affects 
you adversely as well. 

MR. RANKIN: The problem is, at least the way it 
works now, is that two-thirds of the employees have to go along 
with it. 

Under the federal law, for the 40 hours, the 
employer just has total decision making power. The employees 
have no rights. 

SENATOR BRULTE: Did the IWC adopt the federal 
law, or did they allow the two-thirds vote. 

MR. RANKIN: Well, the IWC — the two-thirds vote 


requirement came a long time ago. What they're trying to do now 
is eliminate any vote of employees and simply say there's no 
daily overtime. 

The only obligation on employers in these five 
wage orders would be to pay overtime after 40 hours in a week, 
which is the federal requirement. 

SENATOR BRULTE: So, you don't object to a 
two-thirds vote of the affected employees? 

MR. RANKIN: No, as a matter of fact, we have a 
couple bills in, one by Senator Solis and one Assemblyman Knox, 
which would preserve that requirement. 

SENATOR BRULTE: But you are concerned about the 
one-third that are not — 

MR. RANKIN: We also have in that bill a 
requirement that the employer be required to provide reasonable 
accommodation for those employees who had problems working a 
longer workday, yes. We are concerned with those one-third. 

SENATOR BRULTE: What's the current threshold to 
approve a union contract? 

MR. RANKIN: It's, generally speaking, a 

SENATOR BRULTE: Not two-thirds? 

MR. RANKIN: Not two-thirds, but there's a big 
difference, as you should know. 

The union has meetings which are basically 
democratic forums. 

In the IWC procedures, the employer decides — if 
the employer wants to have his employees or her employees work 


four 10s, the employer can go to the employees and say, this is 
the schedule I propose for you, to work four 10s, and I want you 
to vote on it. The employer conducts the election; the employer 
determines which employees vote. It's not exactly a democratic 


SENATOR LEWIS: Senator Ayala. 

SENATOR AYALA: Ms. Arnold, what is your 
interpretation of the IWC's mission and your obligation to 
provide for the general welfare of the employees? 

MS. ARNOLD: The IWC's mission is just that, is 
to provide for the general welfare of the employees. 

Some of the — one of the things I would like to 
point out that my vote was not to eliminate eight-hour overtime. 
It was to proceed with hearings on following the federal labor 
standards . 

As of that vote, nothing has changed. All we are 
doing is looking into the federal labor standards and proceeding 
with hearings. And my mind is still open, as is everyone else's 
on that Board. 

You're absolutely right, it is what 47 other 
states follow. 

One of the things that has gotten the federal law 
popular, or looking into the federal law as opposed to the 
overtime after eight hours, is the demand of employees. Even in 
the restaurant business, I will often have a student who wants 
to work if they're off four days before a semester starts, wants 
to work more hours, and I can't let them do that because it 


would take them into overtime. Instead of working for the four 
days when they're living at home and get the money together for 
books or whatever, I cannot accommodate it. 

A mother who has to leave work early wants to 
make the time up on another day. I can't accommodate them. 

That also is the problem with the two-thirds 
vote, is that it does not, unless two-thirds people think they 
may need this benefit, you can't offer it for one. And very 
often, especially in my business — please understand, the 
restaurant business is made up of day parts. And most of my 
employees don't work 4 hours a week, but I cannot accommodate 
those who want to either make up time or work extra time when 
they can because of the law. 

SENATOR AYALA: Do you support the minimum wage 
programs or not? 

MS. ARNOLD: Sir, I pay the minimum wage. 

SENATOR AYALA: You have to, but do you support 

MS. ARNOLD: No, sir, I do not. I am on the 
record as feeling very strongly. 

SENATOR AYALA: Let me read to you what the 
Industrial Welfare Commission's all about. Its purpose, as 
described in the State Constitution, is to provide for a minimum 
wage and for the general welfare of the employees, so you're on 
the wrong commission. 


SENATOR BRULTE: I want to just clear something 


SENATOR LEWIS: Let me admonish the audience that 
no demonstrations are allowed. 

Senator Hughes. 

SENATOR HUGHES: Thank you very much. 

Is it true — now, I was told this, and you 
correct me if I'm wrong — in 1996, you had a Burger King 
franchise and you displayed some signs there stating that you 
would no longer have senior citizen discounts? 

MS. ARNOLD: Yes, ma'am. We had to drop our 
senior citizen discounts. 


MS. ARNOLD: Because we are in a business of 
margins. We had to cut out many of the discounts. 

Please understand, we've been running 99 cent 
Whoppers now for close to three years . We had to cut out many 
of the discounts. 

As the cost of doing business increases, and when 
the minimum wage started increasing at that rate — and please 
let me explain. 

The minimum wage was an excellent idea when it 
started back in the days when my 14-year-old father went in the 
coal mines, it was needed. 

We have raised the minimum wage now to the 
point — in the 16 years that I've been in Bakersfield, we've 
gone from paying premiiim rates for 18 year olds to not having 
to, because they're all there. I'm not saying that it causes 
people to drop out of school, but it certainly is not the 


With the discounts we offer in our restaurants, 
when you have a seven percent increase in your cost of doing 
business, you cannot continue to offer discounts. 

SENATOR HUGHES: You know, when you started to 
speak initially, you sounded as though you were sympathetic 
towards mothers with children — 

MS. ARNOLD: I am. 

SENATOR HUGHES: — towards people who could only 
work part-time and could not work full-time, and you wanted to 
make opportunities for them. And that was the reason that you 
were giving as being against the overtime for working people. 

Now, on the other end of the scale, you say yes, 
I cut out the senior citizen discount. Let me tell you, if 
you're lucky, everybody in this room will become one, one day. 
It's a privilege and an honor to be a senior citizen. 

I don't think I understand how you could take 
such a cold, calculated statement like that. Why is it that so 
many, many businesses offer senior citizen discounts, maybe not 
right out, but they have at least a day a week, or something? 
And you don't think it's good business to have senior citizen 
discounts at an inexpensive place like Burger King, of all 
places, which doesn't have the best nutritious food for seniors 
to eat anyway. 

I'm shocked and saddened. 

MS. ARNOLD: Senator Hughes, I'm sorry if I 
shocked you, but discounts that are offered are promotional and 
are factored into our cost of doing business. 

My restaurant business is what it is. I've never 


said that I am a health food restaurant; although, we did in 
fact try it one time, to offer the carrot sticks, celery sticks 
that people said they wanted in our business, and no one bought 

As far as the senior discounts are concerned, we 
have moved heaven and earth to keep from moving our prices. As 
a matter of fact, our Whopper costs less than it did 16 years 
ago, when I came to Bakersfield. 

We had to make a decision, if we were going to 
offer special discounts along with those prices, of how we were 
going to deal with the increased cost of doing business. 

It pained us to do that. I do not enjoy doing 
that. But, you do what you have to do because the bills 

SENATOR HUGHES: Business only thrives as well as 
their workers are able to produce and support that business. 

I think that it was Senator Ayala that started to 
read to you part of the Labor Code. I'd like to quote it to 
you. It's your charge to foster, promote and develop the 
welfare of wage earners of California, to improve their working 
conditions, and to advance their opportunities for profitable 
employment . 

What you have done in your time as a 
Commissioner? I'm not talking about '96. How long have you 
been a Commissioner now? 

MS. ARNOLD: Five weeks. 

SENATOR HUGHES: What have you done in those five 
weeks? What one thing have you done? What have you voted for 


that moves in the direction of fulfilling the obligations that 
you had when you took the oath to become a Commissioner? You 
agreed to be a productive Commissioner. What have you done now 
in those five weeks? 

MS. ARNOLD: I think that vote is very obvious. 
I did vote to pursue and to take testimony on following the 
federal labor standards in the state of California, along with 
the other states out there. 

The reasoning behind that is that I think 
California needs competitive [sic] . It has an opportunity of 
bringing more jobs. 

You're still paying an employee after 40 hours a 
week, but you're giving them the ability to, in many instances, 
work those 40 hours a week. 

SENATOR HUGHES: I didn't hear anything that you 

SENATOR LEWIS: Senator Brulte. 

SENATOR BRULTE: I want to clear this up again. 

Tom, you said earlier that this appointee voted 
to eliminate the eight-hour work day. 

This appointee has now said that she voted to 
take testimony and have a study. 

I'd like the record to reflect which is accurate. 
For my own edification, I'd just like to know which is correct. 

MR. RANKIN: Let me explain the procedure. 

When the Governor told the IWC back in December, 
'95, that he wanted to eliminate daily overtime, and they're all 
his appointees, then the normal procedure is, the IWC can begin 



proceedings on its own motion. And I think they were ready to 
do that after he had his press conference at the Chamber of 
Commerce. That was when he was running for President still, and 
right before he decided not to run any more. 

Then the employers decided to petition to sort of 
shore up his request. And after that, when the IWC receives 
petitions/ they hold a number of public hearings to decide 
whether or not to convene wage boards. Wage boards are made up 
of half employee and half employer representatives. And 
they're supposed to use the same standard there, they're 
supposed to find out — make a finding that, somehow or another, 
the present daily overtime was prejudicial to the health and 
welfare of employees before they convene a wage board. 

So, what they found was, it may be prejudicial, 
the word is may, so they convened wage boards in these five wage 
orders. And those wage boards met over the course of several 
months. They were half labor, half management. And they 
deadlocked in every case. 

And then it went back to the IWC, which had its 
meeting on January 24th, Ms. Arnold's first meeting, and there 
was no evidence before them that the current regulations were 
prejudicial. As a matter of fact, there was a lot of evidence 
before them that it would have cost employees millions if not 
billions of dollars if they changed the regulations. 

But they blithely went ahead without any 
independent study on their part, without any evidence that this 
would help employees, and they blithely went ahead and voted to 
eliminate daily overtime, to put a proposal out — now they 


voted on that. Now they have to have three more public hearings 
before they take a final vote. It's not final yet, but that is 
their proposal. 

And they voted on that proposal — it's 
interesting, because when they gave their charge to the wage 
boards, one of things they told the wage boards was, well, you 
should think about finding a way to give workers more 
flexability, at the same time protecting the workers somehow. 

They forgot all about any protections of the 
workers when they made their vote on January 24. They just 
voted to whole sale do away with daily overtime. 

Yes, they have to have three more public hearings 
before they take a final vote. 

SENATOR BRULTE: So, it was an initial vote? 

MR. RANKIN: It was an initial vote. 

SENATOR BRULTE: Would you agree with that 

MS. ARNOLD: It was a vote to pursue, yes. 

SENATOR LEWIS: Next witness. 

MR. ARMAS: My name's Marvin Armas. I'm 
President of Kern, Inyo, Mono Central Labor Council, 
Bakersfield, California. 

I'm here to speak on not appointing Ms. Arnold to 
the Industrial Welfare Commission. And our findings, both — 
Ms. Arnold forms an opinion, has her mind made up, is not 
open-minded, is not open to compromise, and proceeds straight 
ahead. That's the findings that we have and our council has. 



1 How many of your members are affected by this 

2 ruling or regulation, if we presume it's ultimately adopted 

3 without change? 

4 MR. ARMAS: If it's openly adopted? 

5 SENATOR BRULTE : Without change / how many of your 

6 members are affected. 

7 MR. ARMAS: Are you saying affected immediately, 

8 or to be affected. Every one of them will be affected. 

9 Level playing fields are mentioned at the 

10 bargaining table daily. And when overtime is not paid by 

11 nonunion competitors — I happen to be an union representative 

12 for the United Food and Commercial Workers Union as well as 

13 Secretary-Treasurer — level playing fields are mentioned, and 

14 we would have to give on overtime. It's possible that every 

15 every AFL-CIO member would be affected eventually. 

16 SENATOR BRULTE: Maybe you can walk me through 

17 this. I may be missing something here. 

18 You currently, your members have the right to 

19 negotiate a four 10-hours a day work week — a four day, 10-hour 

20 work week without overtime? 

21 MR. ARMAS: Yes, they do. 

22 SENATOR BRULTE: And nonunion workers do not get 

23 that benefit? They cannot? 

24 MR. ARMAS: No, they can. 

25 SENATOR BRULTE: How do they do that? 

26 MR. ARMAS: The employer usually carves out a 

27 segment and offers a certain person — for instance, a clinic in 

28 Bakersfield has a truck driver. I call him a truck driver; he's 


a nurse that drives a truck, or a medical assistant that drives 
a truck. He works a four 10-hour day. He's the only one in 
that unit that works a four 10-hour day, and he has a separate 
little contract that he signed with his employer. 

SENATOR BRULTE: How does that affect the playing 
field that affects your members adversely? If you can't answer, 
maybe, Barry, you can help me with this. 

MR. ARMAS: I have four supermarkets in 
Bakersfield that are nonunion. If they're allowed to work a 
12-hour day, or a four 10s, or 12-hour days without overtime, 
and cut them short on the 4 0-hour work week, in other words, 
hire many more employees, that market is able to flex better 
than a union market which is required to pay overtime after 
eight hours, after six days in a week, after 40 hours in a week, 
all of the above. 

SENATOR BRULTE: I'll ask the question again of 
Barry. I may be missing something there. 

MR. ARMAS: Okay. 

SENATOR LEWIS: Can I ask you, you mentioned that 
Ms. Arnold was not open to compromise. That was one of your 
criticisms of her. 

MR. ARMAS: Yes, I did. 

SENATOR LEWIS: And you made this determination 
based on her five weeks of being a member of this committee, or 
does this go back longer than five weeks? 

MR. ARI^AS: No, this starts back — when I first 
became acquainted with — well, actually knew of Ms. Arnold was 
probably back in 1994. A newspaper article that came out where 


public employers — public employees entitled to disability pay, 
disability retirement pay and still being able to work. 

Ms. Arnold basically came out in the newspaper 
there in Bakersfield and said that they didn't offer that in her 
business, that her employees were entitled to Social Security, 
workers compensation, and state disability, which are required 
by law. 

Later on, she had a letter to the editor 
basically talking about spending money. I believe it was on 
Operation Clean Air. Employers with over a hundred employees 
would be required to, you know, have people either car pool or 
save gas, work shifts together, and things like that. She came 
out and basically said that the government shouldn't mandate 
employers how people get to work. 

And I first met Ms. Arnold about October, 
September or October of this year. We debated in front of a 
high school, civics classes, about 70 students, on the minimum 
wage, or what I called — yeah, the minimum wage bill. 

SENATOR LEWIS: Now, you want to retain the 
current law. Ms. Arnold has voted to proceed with additional 
hearings and moving toward the federal standard of 47 other 
states. You think she's not willing to compromise. 

What are you willing to compromise? 

MR. ARMAS: I'm not on the Commission, but I 
think I could compromise things. 

SENATOR LEWIS: Well, one of your principle 
criticisms of her was that she was inflexible and unwilling to 


What are you willing to put on the table in terms 
of moving towards -- 

MR. ARMAS: There's many things that could be put 
on the table and others. 

First of all, who would police this. I 
understand it would be the employer, of course. 

The second thing is that overtime, if it worked 
for flexing of the employer and an employee agreed up to four 
hours a week very possibly, that an employee could work 12 hours 
without getting overtime in order to make up 4 hours from 
another day, or what have you. 

So, there are other ways. 

SENATOR LEWIS: Ms. Arnold, any comments? 

MS. ARNOLD; Thank you so much. Senator Lewis, 
because there are a few things I really would like an 
opportunity to clear up. 

It's absolutely right, I am on record about 
government disability. But that was in response to a massive 
story that ran in the Bakersfield California about a very — 
about some very, very clear-cut abuses in the system. And that 
was my response. 

The fact that I have hourly employees who are 
temporary, who are part-time, and who, please God, go on to 
bigger and better things, is the reason that we cannot provide 
retirement or anything of this nature. 

And the point that I had tried to make in that 
story very hard was that I thought it was unreasonable to expect 
taxpayers to support a system that allows this sort of abuse. 


This was not just a clear-cut issue of Terry Arnold discussing. 
It was a very, very hot issue in Bakersfield at that time. 

SENATOR LEWIS: Thank you. 

Any additional questions? 

SENATOR BRULTE: No, but I just want to tell you, 
I'm glad you got rid of the healthy food in your 

MS. AP^NOLD: It's because no one came to buy it. 

SENATOR LEWIS: Next witness. 

MR. McKINNON: Good afternoon. My name is Matt 
McKinnon. I am the Secretary-Treasurer of the California 
Conference of Machinists. We represent some 100,000 union 
members and retired union members in the State of California in 
manufacturing air transport, municipal employees, timber, and a 
number of other industries, automotive. 

I find it kind of ironic today that we walked 
into the hearing today. There's a number of members from every 
reach and every corner of the state that came down today. And I 
found it ironic, we walked into the hearing today, to be hearing 
about human rights, the difference between human rights in 
China, and another part of China where they have Nike plants 
where children work 16 hours a day. 

I found it really interesting that now we finally 
get a chance to talk about human rights in California. 

Since 1972, workers, manufacturing workers' 
wages, adjusted for inflation, have been declining, while 
corporate profits have been rising. 

And it seems to me that we continue to have 


operations that are designed to take us to the lowest common 
denominator. We have opposition to minimum wage, and now we 
have taken away daily overtime from workers in California. 

A great deal of difficulty. I think that, given 
the job insecurity that manufacturing workers have faced in 
California/ the notion should be to discourage anything more 
than an eight-hour day with overtime, and the notion should be 
to put as many people to work as possible. 

If we have lost sight of that in this state, it's 
time for people to get a wake-up call. 

Now, there are a number of questions raised here, 
and there are some answers that maybe some of the others 
couldn't provide. There was a question asking whether union 
contracts, or people under union contracts, are impacted by this 
kind of change. 

Well, the law hasn't even changed, and there's 
already been two proposals across the table with Machinist Union 
employers where they have proposed eliminating overtime language 
to line up with whatever the law is. So, yes. 

I think that if you're adding an implication of 
this kind of change, one of the implications is, you could also 
disrupt labor-management relations in the unionized 
environment. I imagine there are those in this state that would 
like to see that happen, but that is not good for this state 

So, in sum total, given a predisposition on the 
minimum wage, and given a vote already — and let's not play 
games about the 40-hour week stuff, and the state law and 47 


states. There's a proposal in the federal Congress last year to 
change it to 160 hours in a one-month period before you paid 
daily overtime. What we're talking about is cutting workers' 
pay, and it's being pushed on several different fronts. So, 
let's not play semantical games about what states have it and 
what states don't have it. 

We have a predisposition on a couple of issues 
here that tell me that this candidate for this position is no 
where near qualified to represent the workers in this state in a 
nonpartisan fashion, to take care of the business of the workers 
of this state. 

Maybe you want to create a commission that takes 
care of someone else's interests, but this Commission is about 
watching after the least of us. 

If you take the minimum wage discussion, if you 
take that minimum wage discussion that Senator Hughes raised, 
let's be honest about that. The senior citizen discounts, those 
things that were posted were posted politically. They were 
posted right at the time when there was minimum wage ballot. 
Let's not kid ourselves what that was about. There was a ballot 
initiative on the ballot when those were posted in the windows. 
I recall the day it was done. 

Frankly, the notion that you had to take away 
from senior citizens over paying people a quarter an hour more, 
I think McDonald's just cut the quarter-pounder to 55 cents, and 
you're charging 99 for the Whopper. So, there's your senior 
citizen discount, thank you. 

This is a very, very disturbing direction in this 



Thank you. 


MR. BROAD: Mr. Chairman and Members, I'll be 
brief. Barry Broad on behalf of the United Food and Commercial 
Workers, the Amalgamated Transit Union, and the Engineers and 
Scientists of California. 

I believe quite a lot has been said already, and 
I won't belabor these points, but let me say this. 

The proposal to eliminate daily overtime really 
will affect certain people in this state more than others. Let 
me explain who. 

People that are working full-time, 40-hour a week 
jobs, they get overtime after 4 hours in a week whether they 
work -- whatever day, whatever time they work over 40, they get 
overtime. So this is — this proposal that people that get 
daily overtime are very often part-time employees, the largest 
growing segment of the work force, people who work less than 

Now, the way overtime laws work, the 40-hour 
rule, you only get overtime if you work more than 40 hours in a 
single job. So, this fastest growing segment of the work force, 
which includes many, many people who work more than one 
part-time job, can accumulate many hours in the week over 40 
without getting overtime pay. 

Who are these people? These people are the 
working poor. The people that are struggling at the bottom of 
the wage scale. The people that we're trying to put into the 


1 labor market who are on welfare. 

2 Many of them are single parents. Many of them 

3 are in families where you have more than one parent working, and 

4 more than one parent working more than one job to make ends 

5 meet. So, these are people that are struggling with the 

6 greatest of problems. 

7 I ask myself, I am an employer. I employ 

8 someone. Do I pay overtime for people if they have to go to the 

9 doctor, or do they have to make-up time and all that stuff? No, 

10 of course not. Because I'm one of those employers that provides 

11 sick leave, and health insurance, and vacation time. Someone 

12 needs to do pressing personal business during the work day, they 

13 have that leave coming to them. They earn it. 

14 But I'm at the higher end of the employers. I 

15 have a union contract, in fact, so that my employee has these 

16 benefits. There's no question of make-up time, because what 

17 you're talking about when you're talking about that issue are 

18 employers that don't provide sick leave, don't provide vacation 

19 pay. They provide nothing. 

20 Now, Ms. Arnold is on the Industrial Welfare 

21 Commission to represent employers, the employer interests. 

22 However — and I've rarely come here to oppose an employer 

23 representative — however, there are employers and there are 

24 employers. And I think that there are some things, and this has 

25 been hit on, some issues that are very, very basic. The minimum 

26 wage, overtime, these are matters of consensus in our society. 

27 When this administration refused, and the 

28 Industrial Welfare Commission refused to raise the minimum wage. 


the minimum wage was passed overwhelmingly by the voters without 
much controversy, because the issue is not of controversy. 

Nevertheless, we have someone here today who's 
expressed opinions which I think are out of sync with the 
statutory mandate of the Commission. 

Whether the person represents the employers, 
whether the person represents employee interests, or whether the 
person is the public member, we need to have someone on the 
Commission, even representing employers, who is comfortable with 
the basic statutory mission of the Commission, not fundamentally 
opposed to all that it represents. 

So, with that, I would join Mr. Rankin in 

Thank you. 

SENATOR LEWIS: Do you have any comment? You 
want to respond right now? 

MS. ARNOLD: Not especially. 

SENATOR LEWIS: Any additional witnesses. 

SENATOR AYALA: The Chairman has requested that 
we with hold any action until he gets back here. He'll be 

We do have a Constitutional mandate as it 
pertains to IWC, and it doesn't appear like this candidate 
fulfills that mission. She's against what it stands for, and I 
don't see how we can support that candidate. 

But the Chairman will be back shortly. 

SENATOR LEWIS: Would you like to go ahead and 
make a closing statement at this time? 


MS. ARNOLD: Yes, I would. 

I understand the controversy that I probably 
started here because of points of view that I hold very, very 

I made the statement earlier that minimum wage 
definitely had a time and a place in our society. 

However, I think we must remember what jobs are 
currently covered by minimum wage. You can get out of high 
school and go in the oil fields, and you're not earning minimum 
wage. Those jobs which pay minimum wage are entry-level service 
industry jobs. No skills. And they are low on the value chain 
for the consumer. 

I am a franchisee. I can charge anything for a 
Whopper I choose. I can charge 25 cents. I can charge $2.50, 
but no one's going to buy it. 

I'd like to bring that marketing ploys can 
sometimes be a two-sided sword. The cost of doing business must 
always be met. It must always be met, and that is constantly 

Anyone who deals in agriculture understand that 
tomatoes can go from one price to the next. You must always 
cover your costs. 

What we try to do with our employees is encourage 
them, because we are a part-time business, when they fill out 
their availability schedule, to look into the child care, the 
transportation to work, and also one other thing: employers' 
training resource and the adult school. 

I don't apologize for my stand on minimum wage. 


Except for one manager in my business, every one of them started 
off as 15 or 16-year-old kids working for me. The partners, the 
minor partners I have in my other business used to be my 

I go out into the schools any time I'm asked, and 
if I'm not asked frequently enough, I call and I offer. And I 
tell people, minimum wage will not support you and your 
children, and it cannot, because those jobs which pay minimum 
wage are those services and products valued very, very lowly by 
the consumer, and in those industries with very, very narrow 

The idea is to get people started, to get them 
used to work, get a work history, and then move up and on, where 
they have the opportunities. 

As far as a 40-hour week, yes, I do look at 47 
states. We keep reading about all the millions of jobs that 
have been created. Where are they? Kern County's unemployment 
rate is 14 percent, and it increases up the Valley. 

California needs some of those million jobs that 
are going other places. We need to look very, very, very hard 
at what makes us different. Why aren't they here? Why don't we 
have the jobs for people to move into? 

People of marginal skills and ways to grow — you 
can only grow so far in service industries, then you stop 
becoming a service and convenience, and you become a luxury, and 
even those jobs diminish. 

You've been very patient with me. This has not 
been nearly as bad as I thought it would, and I thank you all 


very much. 

SENATOR LEWIS: Thank you, Ms. Arnold. 

We have a request from the Chairman that we 
withhold action on your confirmation vote until he returns. So, 
if you'll be patient with us for just a little bit longer, we'd 
appreciate it. 

Thank you. 

MS. ARNOLD: I can be very patient, Mr. Lewis, 
but can I move? I feel like I'm in the middle of a stage. 

SENATOR LEWIS: You're excused. 

We're moving on with the agenda. Next on our 
agenda is Lou Barnett for the California Unemployment Insurance 
Appeals Board. 

Mr. Barnett, do you have an opening statement? 

MR. BARNETT: I do have an opening statement and 
some information for the Members. I can dispense with it. It's 
about a three-minute statement, if the Committee would rather. 

I've had the opportunity to meet with Senators 
Ayala and Brulte previously. I've had the opportunity to meet 
with the Vice Chairman's staff and Member Hughes' staff as well, 
and I understood that previously. Senator Lockyer did not have 
any questions for me. 

The purposes at this meeting are primarily to 
address any new questions, or to put any issues on the record 
that Committee Members make. So, it's your pleasure. 

I do have a three-minute statement if you would 

SENATOR LEWIS: Let's find out. Because we have 


two Members of the Committee that are absent right now, probably 
would be best if you went ahead with your opening statement. 

MR. BARNETT: Okay, Mr. Vice Chairman, Members of 
the Committee, it's a pleasure to appear before you today to 
discuss my service on the California Unemployment Insurance 
Appeals Board. 

I've a member of the Board for the past five 
years, and it's been my pleasure last year-and-a-half to be 
Chairman of the Committee. 

The handout that I have provided to you presents 
an overview of the operations of the California Unemployment 
Insurance Appeals Board. As you can see, it's an adjudicatory 
body that decides 200,000 cases a year in the areas of 
unemployment insurance, state disability insurance, and the tax 
systems that support those systems. Over 90 percent of our work 
is UI and paid for with federal funds. The balance are funded 
from the State Disablity Insurance. 

During my tenure on the Board we've encountered a 
great fluctuation in our workload. It's gone from 163,000 cases 
during my first year, up to 290,000 cases, and back now to a 
projected 203,000 cases in the current year. 

Since our funding is geared to the work we 
produce, it has been necessary for us to adjust our staff to 
this fluctuating workload. In the past two years, we've gone 
from over 700 full-time equivalent positions to about 540 at the 
present time. We have done this by the use of permanent 
intermittant, limited term, and retired annuitant staff that 
have enabled us to expand and contract our staff in fairly short 


time without having to lay off permanent staff, with the 
exception of two individuals, both of whom had other 
alternatives but chose to elect being laid off. 

We have managed to adjust to this changing 
workload with no impact on the quality of our decisions. We 
continue to have one of the lowest higher level appeal rates in 
the nation. Even with this lower rate, the caseload for our 
Board continues to be much greater than for any other state 
appeals board, due to the fact that we receive two to three 
times the number of initial appeals that the next largest states 

In terms of timeliness, we continue to exceed the 
Department of Labor standards with our field decisions, 
completing work on over 60 percent of our cases within 30 days 
or less from the date the appeal is filed, and over 80 percent 
of the cases completed within 45 days of being filed. 

We have also recently reviewed and updated our 
precedent decisions to be consistent with state law and with any 
court decisions that have occurred since we last reviewed them. 

We've also successfully completed the upgrading 
of a 14-year-old computer system, at cost of under $150,000, 
plus the additional cost for upgrading hardware from obsolete 
equipment . 

Thank you for consideration of my appointment. I 
will be happy to answer any questions, although at this time, if 
you'd prefer to go back and conclude your other item of 
business, it's your pleasure. 

SENATOR HUGHES: Mr. Chairman. 


CHAIRMAN LOCKYER: Senator Hughes. 

SENATOR HUGHES: I like many of the things that I 
heard you say. It sounds as though you're working very 
conscientiously on your task. 

But how do you feel about the fact that our state 
benefits rank below 34 other states? Do you support efforts to 
raise unemployment insurance benefits? 

MR. BARNETT: Well, our position is as a 
quasi-judicial adjudicatory — 

SENATOR HUGHES: I didn't ask you what our policy 

I said, do you support? I'm talking about you, 
Louis Barnett, as an individual. Do you support efforts to 
raise unemployment benefits? 

I'm not asking for you to speak for the group. 
I'm asking you to speak for yourself. 

MR. BARNETT: We would have a conflict of 
interest. I would even have a conflict of interest in 
addressing that. 

To the extent that the amounts paid for either 
unemployment insurance or disability insurance go up, more 
people will claim; there will be more appeals, and we will have 
more business. So, we have a conflict the there of being biased 
in favor of more work for our agency. 

With regard to the policy issues of whether 
unemployment insurance should pay more or less, I gather that 
there is a robust debate on that issue in this nation. 
President Clinton has said that the system is a rip-off for 


employers and does not serve the employees . 

I don't know what these issues are. These are 
policy issues. We try to stay away from policy issues because 
it's our job to adjudicate the decisions that come before us on 
appeal . 

SENATOR HUGHES: And you think you're doing an 
adequate job of doing that? 

MR. BARNETT: We're doing the best we can, 



CHAIRMAN LOCKYER: Hi, sorry to miss the 


MR. BAPOsTETT: I doubt you missed that much. 

CHAIRMAN LOCKYER: There are some questions that 
I did want to ask you about. 

One is, I notice the Board and EDD are 
contemplating closing some of the offices. I'm a little unclear 
who really makes the decision. 

Could you clarify who decides these matters? 

MR. BARNETT: That would be my pleasure. 

First of all, EDD makes their own decisions, and 
we make our own, with one exception that I will deal with 
shortly. When a decision is made to close an office, that's 
generally a Board level decision for us. It will be on the 
advice of staff, and it will also be in relationship to the 
fiscal needs of the California Unemployment Insurance Appeals 


Most of what we spend is for people. We would 
prefer to protect jobs and employees to the extent that we can, 
and we have looked at facility consolidations. 

The one exception is that in a case where we have 
co-located hearing rooms with EDD. If they close one of those 
sites, our hearing rooms will be shuttered at the same time. 

CHAIRMAN LOCKYER: How many of those are there? 

MR. BARNETT: We have 88 hearings rooms 
co-located in EDD buildings. We also have approximately 86 
hearing rooms in our own 11 headquarters sites around the state, 
or field offices. 


MR. BARNETT: Then we have another 21 sites with 
63 satellite hearing facilities, where we do not house staff on 
a daily basis, but where we're available to the public. 

We strongly believe that we need to be as 
available to the public as possible. As EDD moves more and more 
toward telephone determinations, we become the first contact for 
someone with the public who has a problem with the system. And 
we think it would be unfair not to give as many people an 
opportunity to have an in-person hearing. We believe that 
that's a better form of due process than a telephonic hearing, 
so we're trying to keep as much of a presence as possible. 

We have hearing facilities in our 11 field 
offices in your district, and in or near Member Ayala's 
district, which is also adjacent to Member Brulte's district. 
We have a facility in Orange County which is adjacent to Member 
Lewis's district, and in Los Angeles. We will do everything we 


can to protect and keep those open. 

But ultimately, myself and my Board members 
would be the final determinators of whether to consolidate or 
expand a facility. 

CHAIRMT^N LOCKYER: What stage are some of those 
considerations of consolidations? 

MR. BARNETT: Would you like to pick a particular 

CHAIRMAN LOCKYER: Well, I don't want to be 
overly parochial, but Oakland. 

[Laughter. ] 

MR. BARNETT: You know, if I speak forthright ly 
here, I'm probably going to step on somebody's toes, but let me 
just go ahead and do that. 

There's no polite way to fuzz up the issue around 
the Oakland office. We have a facility in Oakland in the Kaiser 
Building. We're paying a nice hefty rent for it, but there's a 
State building opening there. It's the Governor's policy that 
State buildings will be filled. It's the policy of General 
Services to implement that. 

If we are to move to the State building in 
Oakland, our cost of rent, due to the fact that it's at a higher 
rate than what we're paying now, and that they want us to take 
more square feet than we need, would increase our rent by about 

CHAIRMAN LOCKYER: You mean the State building 
site is more? 

MR. BARNETT: Yes, the State building site is 


more . 

CHAIRMAN LOCKYER: Because of larger space, or 

MR. BAIWETT: Larger space and higher per square 
foot rent. If we were to fund — 

CHAIRMAN LOCKYER: Their policy isn't to waste 
money; is it? 

MR. HARNETT: I believe the argument is that the 
long term benefits to us will be better. That your rates — 

CHAIRMAN LOCKYER: What are they? 

MR. HARNETT: That your current rates in the 
market in Oakland are abnormally low, and that over time, we 
will benefit by being in there, even though the short-run costs 
will be higher. That's not my business. 

CHAIRMAN LOCKYER: It's not mine, either. 

MR. HARNETT: So, there 're probably wise people 
on both sides. 

CHAIRMAN LOCKYER: Hut my point is, either of 
those choices doesn't mean you would have to close an Oakland 
office; does it? 

MR. HARNETT: Here's what would cause us to close 
an Oakland office. If we were given the choice of moving in and 
then having to lay off staff or make financial reductions so 
that we could not perform our function to serve the public in 
that area, we would have to make the decision between a more 
expensive facility and moving out of Oakland, maybe having a 
satellite facility south county, north of Oakland. 

You can't shutter a facility in one place and 


move right across the street, as you are probably aware under 
state regulations/ but we would have to continue to serve the 
public. So, we could continue to do that through satellite 
facilities that were cheaper, but not have a major facility 
there. However — 

CHAIRMAN LOCKYER: I'm not sure when you say 
satellite services. 

MR. BARNETT: A hearing facility where we don't 
house people, administrative law judges and support staff, on a 
day-in day-out basis. It would be a store- front office facility 
of some kind where our judges would go, and they would hear the 
cases that were presented to them, and then they will return to 
an office, maybe in San Francisco. 

But let me tell — 

CHAIRMAN LOCKYER: You know what I don't 
understand? I haven't done this a lot, but a couple of times I 
just wandered through the Oakland facility. 

If you go into a judge's office, it's just stacks 
and stacks of files everywhere. I guess because they have 
inadequate support staff. 

I don't know how they would — I guess they'd 
leave all those back home and take the right file to go to the 

MR. BARNETT: Right. They would take the files 
for those cases with them. 

But cutting to the chase here, we are in deep 
negotiations with the Employment Development Department. We 
believe that we are going to be able to come to a resolution of 


this matter in a way that will be favorable to General Services 
and favorable to yourself and the constituents of your 
district. That is, we will be able to continue to keep an 
office there and probably move into the State building without 
having to make staff reductions at our agency to pay for it. 

CHAIRMAN LOCKYER: It's sort of vague and 
general, and I guess that's just the nature of these matters. 

MR. BARNETT: It would be more — I would prefer 
to advise you or your staff afterwards of the more blunt 
specifics of the negotiations if I could, but I think you'll be 

CHAIRMAN LOCKYER: I think maybe similar 
questions could be asked by people from all around the state 
with respect to 170 or so different sites, and the satellites, 
and what kind of services are available. 

I only know just because of my own awareness of 
the drive times and all, if people from Oakland have to go San 
Francisco for a hearing, or to do the routine work with the 
Board, that's quite an inconvenience. 

I hope that isn't where this is going to all wind 

MR. BARNETT: We hope not. 

CHAIRMAN LOCKYER: I guess there are some 
suggestions that have been made. You might, perhaps, briefly 
comment on any of these: to allow more time to file an appeal, 
to facilitate the work. Another suggestion has been that there 
be just like an appeal form that people would get with a denial 
so they would just routinely be able to notice in that, in or 


not, rather than to have knowledge to go and ask for one. 

Have you heard those kind of administrative 
procedural debates? And what's your view about them? 

MR. BARNETT: I have heard some discussion of 

7\nything that facilitates people being able to 
make an appeal will generate for business for our agency. We 
have no problem with having that opportunity to continue to 
employ our people. 

But we don't interact with a claimant or an 
employer, or the Employment Development Department, until the 
determination has been issued and someone wants to appeal from 
that determination. 

So, we would not have the opportunity of 
providing a claim form to a person until after they'd already 
received a determination from EDD. So, they would be the ones 
that would have to provide a form. 

They do have one, but as you rightly point out, 
you have to ask for that form. 

However, we will recognize a cocktail napkin, the 
back of an envelope, even a letter that comes in saying, "I got 
a raw deal," not asking for an appeal. We'll interpret that to 
be a request for an appeal, and we will give them that 
opportunity. So, we're very liberal in that regard. 

CHAIRMAN LOCKYER: And recognize its legitimacy? 

MR. BARNETT: Absolutely. 

CHAIRMAN LOCKYER: There have been questions 
raised by our staff to just inquire about your other jobs, or 


other sources of employment, occasional employment and income. 

I guess this is a full-time work; isn't it? 

MR. BARNETT: Absolutely. 

CHAIRMAN LOCKYER: I thought it was. Do you 
contemplate other work, campaign consultant, or fundraising, or 
other things of that sort? 

MR. BARNETT: Definitely not campaign 
consultant. This would not be a good position to have with my 
party affiliation that have that kind of outside work. 

However, I do have seven kids at this point. 
Three of them are in college. I've got two at Jesuit High 
School up here; one's still in grade school. And if I can, on 
my own time, make another nickel, I certainly am going to. 

CHAIRMAN LOCKYER: Well, you seem to have found 
productive uses of our own time. 

[Laughter. ] 

MR. BARNETT: Senator, that may be the opening I 
need to introduce my wife, Jane. 


MR. BARNETT: I certainly did not do it by 

CHAIRMAN LOCKYER: Congratulations. 

Now what are the likely — I'm only looking for 
areas of potential conflict. Obviously, you can't predict all 
possibilities for future employment, but when you rule out 
campaign consulting, which you've done ably in the past, what's 
left? What are you thinking about for alternatives? 

I'm sympathetic to the kids in college and all 


those reasons. 

MR. BARNETT: It's hard to predict. 

CHAIRMAN LOCKYER: Don't we pay you guys enough? 

MR. BARNETT: The quibble would not be about the 
pay. Besides that, the amount was known going in. 

CHAIRMAN LOCKYER: Too many mouths to feed. 

MR. BARNETT: Too many colleges to feed, I think 
is the problem. 

I've sold an op. ed. piece to the Orange County 
Register . I've been involved with Excel Telecommunications. 
I've tried to do a number of things in my past lives when I've 
held full-time jobs. I've also always had something else I was 
doing on the side. 

CHAIRMAN LOCKYER: I get the general idea. I 
don't see any conflict associated with it. 

SENATOR BRULTE: Your wife works for Senator 
Leslie; is that correct? 

MR. BARNETT: Thanks. Do you want to point out 
that she's not on the state payroll, too, while you're at it? 
Is there a trap door here, Jim? 

[Laughter. ] 

CHAIRMAN LOCKYER: Are you supporting Mount joy 
for Lieutenant Governor? 

[Laughter. ] 

CHAIRMAN LOCKYER: She works on fundraising? 

MR. BARNETT: No, she is the only staff person on 
the campaign for Leslie right now. She does not work on 


1 CHAIRMAN LOCKYER: But in a campaign position. 

2 MR. BARNETT: But in a campaign position; that's 

3 correct. 

4 CHAIRMAN LOCKYER: Well, actually, with most of 

5 US/ that's a commendation, not a criticism. Senator Leslie is a 

6 fine Member and easy to work with. I think we can't complain 

7 about whomever is associated with his office. 

8 MR. BARNETT: I take it we wish him half well. 

9 CHAIRMAN LOCKYER: He should always win 

10 primaries. 

11 [Laughter.] 

12 CHAIRMAN LOCKYER: Are there other questions from 

13 Members? Senator Ayala. 

14 SENATOR AYALA: Mr. Barnett, until recently the 

15 Chief Administrative Law Judge performed the duties of the 

16 Executive Officer. Just recently, you appointed an Executive 

17 Officer. 

18 Why was that necessary? 

19 MR. BARNETT: The history of our agency is that 

20 we have been a quasi-judicial organization, and our workload has 

21 grown exponentially over the years. 

22 There was a time when there were, I think, five 

23 hearing referees for the whole State of California. Those 

24 positions are now called administrative law judges. 

25 As we grew as an agency, we have promoted lawyers 
2 6 to hearing referee and given them the title now of 

27 administrative law. Along the way, the whole process of these 

28 adjudications has changed. What was envisioned in the '30s was, 


1 a citizen in the community would hear the employer in the 

2 community, and their ex-employee, and listen to both sides and 

3 make a decision. 

4 Since that system was set up, we've evolved this 

5 administrative law field very, very thoroughly. So, we now have 

6 a very sophisticated, complicated — complicated in terms of 

7 the average person, I'll put it that way — system. 

8 What we've done is, we've promoted our lawyers, 

9 judges, to positions of administration. And they haven't always 

10 had the skill sets for administrative purposes. 

11 In hiring an Executive Director and creating that 

12 position, we looked at a 1980 opinion from the Attorney General 

13 that said that the Board had the authority to delegate its 

14 powers and certain other authority to an Executive Director or 

15 to a person other than the Chief of Field Operations. This is 

16 perfectly consistent with civil service law. It's fully 

17 consistent with Government Code, and it's consistent with the UI 

18 Code itself. 

19 So, we felt the need for more management 

20 experience at a time, as I indicated in my opening statements, 

21 that our workload was spiraling up and then spiraling down. We 

22 have made the decision to create the position, found a competent 

23 candidate who has served ably in Republican and Democrat 

24 administrations in the past. 

25 We had to submit this to DPA for their approval, 

26 so we believe that everything we've done is fully within code, 

27 appropriate for civil service considerations, and that the 

28 result is a better, smoother functioning agency. 


1 SENATOR AYALA: Your caseload is increasing/ you 

2 mentioned. 

3 MR. BARNETT: Well, it did spiral up to 290,000 

4 cases, and we're down to, I think, projected 203,000 now. So, 

5 we've been going up and down. 

6 SENATOR AYALA: How does that go in line with the 

7 phasing out of some district offices, if you're capable of going 

8 up and removing some of the offices in the districts? 

9 MR. BARNETT: We're counter cyclical. When the 

10 economy's good, we get smaller because our workload gets 

11 smaller. When the economy is bad, we start having great times 

12 at our agency. So, we were hiring people; we were adding space; 

13 we were generally increasing. 

14 As our workload went down, we looked at office 

15 space that we could shrink here in Sacramento. We combined two 

16 offices into one. We're trying to find the right mesh between 

17 facilities where we can hear the cases, interface with the 

18 people, and not put an undue burden on them for travel. At the 

19 same time, we don't want to lay off staff to pay for it. 

20 SENATOR AYALA: So, a lot of the appeals are now 

21 handled by phone? 

22 MR. BARNETT: Some appeals are handled by phone 

23 at this point. If the parties would have to travel an 

24 inordinate distance, we have telephone hearings, in particular 

25 in the northern part of the state. If the parties would like to 

26 wait, then we can't provide them a timely hearing, but we can 

27 get an administrative law judge around to their area for an 

28 in-person hearing. If they would prefer a quicker hearing, we 


1 can provide a telephone hearing to them. 

2 The feeling of the Board, though — 

3 SENATOR AYALA: Did the creation of this new 

4 position change the chain of command within the Appeals Board at 

5 all? 

6 MR. BARNETT: It's changed the chain — well, 

7 chain of command would be difficult to analogize to. We have 

8 the old chain of command still in place, where those people who 

9 are responsible for the adjudicatory function, the Chief of 

10 Field Operations who's in charge of all the ALJs under him, and 

11 then the Chief of Appellate Operations and the ALJs under him, 

12 still report directly to the Board. 

13 With the creation of the Executive Director, what 

14 we have done is delegate to him certain of the powers that the 

15 Board itself had as an appointing authority under state law. 

16 So, we've vested within him the power to do our will, to see 

17 that it's done. And in the bargain, what we've picked up is 

18 additional expertise in the area of budgets, expertise in the 

19 area of civil service and management, and things of that nature. 

20 SENATOR AYALA: I have no other questions, 

21 Mr. Chairman. 

22 CHAIRMAN LOCKYER: Are there other questions? 

23 Is there anyone present who would wish to comment 

24 either for or opposed? Mary Jane, what do you think. 

25 I would note for the record that former Senator 

26 David Roberti called to speak positively on your behalf. That's 

27 obviously a significant recommendation. 

28 SENATOR LEWIS: Move confirmation. 


CHAIRMAN LOCKYER: We have a motion to confirm. 
Any last comments or questions? Are you ready to call the roll? 
Please call the roll. 

SECRETARY WEBB: Senator Ayala. 



Ayala Aye. Senator Brulte. 

Brulte Aye. Senator Hughes. 

Hughes Aye. Senator Lewis. 

SECRETARY WEBB: Lewis Aye. Senator Lockyer. 

SECRETARY WEBB: Lockyer Aye. Five to zero. 
MR. BARNETT: Thank you. 

Senator, if I could just say, now that it's no 
longer self-serving, the legislative appointees have been 
outstanding. The organizational changes we've made at the 
agency over the years that I've been on it would not have been 
possible without the participation of legislative members. 

And furthermore, I think there's a tendency to 
feel that a person who is up for confirmation is more sensitive 
at this particular point in time than afterwards. I'm available 
to any Member of this Committee at any point that would care to 
discuss an issue, or any member of your staff. 

Thank you. 
CHAIRMAN LOCKYER: Thank you. All right, Members 


1 we have gubernatorial appointees not required to appear. 

2 [Thereupon the Committee acted 

3 on other agenda items.] 

4 CHAIRMAN LOCKYER: The matter of Ms. Arnold is 

5 still, I guess, on hold. We're waiting for some kind of 

6 communication from the Governor's Office. 

7 SENATOR BRULTE: The administration has been 

8 informing me they will be withdrawing that appointment. 

9 CHAIRMT^ LOCKYER: I've learned to wait for the 

10 paperwork. 

11 We have a letter which I've just received from 

12 the Governor's Office simply saying he hereby respectfully 

13 withdraws for consideration the nomination of the following 

14 appointee, Terry Arnold, Member of the Industrial Welfare 

15 Commission, Sincerely, Pete Wilson. 

16 That particular name shall be withdrawn, and we 

17 don't need to take further action on that item. 

18 [Thereupon. This portion of the 

19 Senate Rules Committee hearing was 

20 terminated at approximately 4:35 P.M.] 

21 — ooOoo — 


I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

^ IN WITNESS WHEREOF, I have hereunto set my hand this 

day of / V^c^ , 1997. 


Additional copies of this publication may be purchased for $3.25 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1 020 N Street, Room B-53 

Sacramento, CA 95814 


Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 319-R when ordering. 

MAY 1 3 1997 






ROOM 113 


MONDAY, MARCH 31, 1997 
1:53 P.M. 


Reported by 




ROOM 113 


MONDAY, MARCH 31, 1997 
1:53 P.M. 

Evelyn J. Mizak 
Shorthand Reporter 










GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NANCY MICHEL, Consultant on Governor's Appointments 


Board of Governors 
California Community Colleges 

State Board of Education 

BILL LUCIA, Executive Director 
State Board of Education 

MARINA M. TSE, Member 
State Board of Education 


Epilepsy Foundation of America 

Los Angeles & Orange Counties 




Proceedings 1 

Governor's Appointees: 


Board of Governors 

California Community Colleges 1 

Background and Experience 1 

Questions by CHAIRMAN LOCKYER re: 

Most Contentious or Difficult Issue 

before Board 2 

Questions by SENATOR HUGHES re: 

Vote vis-a-vis Petrossian • s Vote 3 

Role of Community Colleges in Implementation 

of Welfare Reform 3 

Personal Efforts to Accommodate Welfare 
Recipients 4 

Availability of Child Care on Campuses 5 

Questions by SENATOR AYALA re: 

Board's Position on Student Fees 5 

Questions by CHAIRMAN LOCKYER re: 

Effect of Proposition 209 6 

Motion to Confirm 7 

Committee Action 7 


State Board of Education 7 

Background and Experience 8 

Questions by SENATOR HUGHES re: 

Number of Low-performing Schools in 

Davis School District 10 

Bringing about Change to Meet Goals 11 

Reason for Success in Elk Grove and 

Davis School Districts 12 


Ways to Improve Compton School District 12 

Charter Schools in Compton 13 

Expansion of Number of Charter Schools 14 

Questions by CHAIRMAN LOCKYER re: 

Number of Charter Districts 14 

Questions by SENATOR AYALA re: 

Position on Public Funding for Private 

Schools 15 

Questions by CHAIRMAN LOCKYER re: 

Issue on Voucher Proposals that Made Them 
Unlevel Playing Fields 16 

Questions by SENATOR AYALA re: 

Experience with Charter Schools 16 

Position on Expansion of Charter Schools 17 

Responsibility for Overseeing Charter 

Schools 17 

School Board in Victorville Refusing to 

Take Responsibility over Charter School 18 

Response by BILL LUCIA, Executive Director 

State Board of Education 19 

Questions by SENATOR HUGHES re: 

State Board's Obligation Is Numbering 

the Charters 20 

Response by MR. LUCIA 20 

Ability to Vote in Opposition to Colleagues 

on Board 21 

Questions by SENATOR LEWIS re: 

State Board's Responsibility in 

Allowance of Charter Districts 22 

Response by MR. LUCIA 22 

Utilization of Waiver Authority 23 

Questions by CHAIRMAN LOCKYER re: 

Class Size Reduction vs. Longer 

School Year 23 

Questions by SENATOR HUGHES re: 

Benefit of Longer School Year 24 

Comments by CHAIRMAN LOCKYER re: 

Put Over Vote on Appointment 25 


State Board of Education 25 

Background and Experience 25 

Questions by CHAIRMAN LOCKYER re: 

Philosophy on Voucher Proposals 27 

Board • s Goals for 1997 27 

Length of School Days in Orient 28 

Questions by SENATOR HUGHES re: 

Position on Bilingual Education 28 

State Intervention in Compton District 29 

Charter Schools 29 

Teaching Standard English to African- 
American Students 30 

Voucher System 31 

Questions by SENATOR BRULTE re: 

Voucher System Appointee Could Support 32 

Questions by SENATOR AYALA re: 

Foreign Languages 32 

Position on Using Public Funds for 

Private School Vouchers 33 

Position on Charter Schools 33 

Expansion of Charter School System 34 


Questions by SENATOR HUGHES re: 

Knowledge of Charter School at 

Cal State L.A 35 

Witness in Support: 


Epilepsy Foundation of America 

Los Angeles and Orange Counties 36 

Statement by SENATOR LEWIS re: 

Reediest for More Time to Reflect 

on Vote 38 

Termination of Proceedings 38 

Certificate of Reporter 39 

— ooOoo — 

CHAIRMAN LOCKYER: Miss Thakar is first for 
appointees. Good afternoon. 

MS. TH7\KAR: Good afternoon, Mr. Chairman, 
Committee Members. My name is Rosemary Thakar. 

I come before you today to ask you to recommend 
my confirmation as a Governor on the Board of Governors of the 
California Community Colleges. 

I'm a San Francisco resident, a California 
business woman. Our companies employ about four hundred people 
in Southern and Northern California. 

I think I bring a unique experience to the 
Board. I entered a California community college while I still 
had four teenaged sons at home. Attended school full time on 
my way to the University of California at Berkeley where I 
received a Bachelor Degree. 

I have been a life-long volunteer in causes 
helping young people to succeed where I was not able to do so at 
that same point in my own life. 

I want very much to serve on this body because I 
feel that it makes an enormously important contribution to the 
work force in the State of California. And I think also on the 
Board we need to have diversity. We have only one other woman. 
Ms. Petrossian, who is the President of the Board, and I are the 
only women presently serving on that Board. 

CHAIRMAN LOCKYER: Thank you. You've been there 
since last July? 

MS. THAKAR: Yes. I attended the first meeting 
in July. 

CHAIRMAN LOCKYER: What's been the most 
contentious or difficult issue during these last several months? 
Anything that's been before the Board? 

MS. THAKAR: Well, there are a number of things 
that are important, but I think really the most important issue 
is access. That is, that we make absolutely certain that those 
people who want to come to the community colleges for whatever 
reason are allowed access. 

And beyond that, I would say that we need to 
provide courses and training that will put them into the work 
force. California certainly is the leader in high tech, and the 
community colleges system has a unique opportunity to provide 
that kind of work force to the high tech industries. 

CHAIRMAN LOCKYER: Now, there haven't been 
arguments or disagreements or issues before the Board, have 
there, with respect to access in the last eight or nine months? 

MS. THAKAR: Not ~ 

CHAIRMAN LOCKYER: It's been pretty calm? 

MS. THAKAR: Yes, I would say it's been calm, but 
it's been very serious in that we are trying to maintain and 
serve maximum numbers of people. 

And the most important thing is that we are there 
for them when they need us. 

CHAIRMAN LOCKYER: Senator Hughes. 

SENATOR HUGHES: Thank you very much for coming 

I note that Alice Petrossian is the President of 
your Board? 

MS. THAKAR: Yes, she is. 

SENATOR HUGHES: Do you vote most of the time 
with her, or against her, or sometimes you vote differently? 

MS. THAKAR: I have to date voted with Ms. 
Petrossian for the most part. 

SENATOR HUGHES: So that you usually don't have a 
quarrel with her? She's an educator by background. 

MS. THAKAR: No, no quarrel whatsoever. She 
brings enormous talent to the Board, and the Board is fortunate 
to have her. 

SENATOR HUGHES: What do you think should be the 
role of community colleges in the implementation of our welfare 
reform here in our state? 

MS. THAKAR: We have presently before the Board, 
and the other boards that help to govern the system, a plan to 
accommodate all welfare recipients. I mean, we are very 
concerned that those welfare clients who want to attend college, 
community college system, will be allowed to do so. 

We do know that for every dollar increase in the 
fee structure, about 12,000 students don't come, don't — just 
don't appear because, for whatever reason, either they cannot 
afford it, or they feel that their dollars need to go to other 
places. But there are aid programs in place, and there are many 
concessions made for welfare recipients. 

The most important thing is for us to get them to 
the campuses and for them not to be deterred because they are on 


SENATOR HUGHES: Under the new federal welfare 
reform legislation, the amount of time spent in vocational 
educational training will be limited to only 12 months. And 
most of your certificated programs are two-year programs. 

So, how does the community college system propose 
to modify these programs to really meet the needs of the welfare 
recipients? And what are your ideas about that? 

MS. THAKAR: Well, we're looking for outside 
funds. We're looking to industry to help us. We're looking to 
our foundation to help us with funds to make sure that these 
people are able to complete the training required for the 
particular certificate which interests them. 

SENATOR HUGHES: If there are some campuses that 
really don't have a program that will accommodate these 
recipients a little more, what would be your particular effort, 
as a member of the Board, to see that they meet the needs of the 
student population that wants to have access to a program like 
this . 

I'm thinking, a lot of women with children, some 
of these will be leaving their home for the first time, who 
never even thought about the possibility of going to a community 

MS. THAKAR: Well, there certainly are — I can't 
say for certainty how many programs there are, but I do know 
that there are child care programs in place at campuses where 
there is a high demand for that, so that child care should not 
be a deterrent for a client to come to the campus. 

SENATOR HUGHES: Are there any of your community 
colleges where there are no child care programs, or where there 
is minimal child care available? 

MS. THAKAR: I can't say for certain, being as 
new as I am to the Board. 

I do know, though, that within a given area where 
you will have three or four campuses that the student can get 
to, one of those campuses is going to be able to provide child 

SENATOR HUGHES: Would you as a new person there 
look into that and find out? 

MS. THAKAR: I will certainly do that. 

SENATOR HUGHES : As woman to woman, find out 
where there's a paucity of child care available. 

And we would imagine that most people want to 
become independent and productive. 

MS. THAKAR: Oh, absolutely, absolutely. 

SENATOR HUGHES: So, do you make a commitment to 
see what you could do about that? 

MS. THAKAR: Yes, yes. I will check with the 
Chancellor's office, and I will communicate to your office about 

SENATOR HUGHES: I appreciate that very much. 
Thank you. 

SENATOR AYALA: What is the position of the Board 
of Governors as it pertains to student fees? 

MS. THAKAR: Well, as I said, we know for a fact 
that every dollar increase in fees deters 12,000 students from 

attending. That's system wide. 

I would think that we need to, at a minimum, we 
need to maintain fees where they are, and where possible, where 
funds permit, reduce the fees. 

SENATOR AYALA: Your position is that you're not 
interested in raising the fees but maintain them where they are? 

MS. THAKAR: No, I think the Board as a whole 
feels that the worst possible thing we could do for our 
constituency is to raise fees. 

SENATOR AYALA: And you support that position? 

MS. THAKAR: Absolutely. At this level, 
absolutely, yes. 

When I attended, Senator, there were no fees. 
When it attended Diablo Valley College, there were no fees to 

CHAIRMAN LOCKYER: Has there been a discussion of 
Proposition 209 that was passed last November? Has there been a 
discussion at the Board at all of what that means in terms of 
any policies or programs? 

MS. THAKAR: Well, my interpretation of what that 
means to the Board is that we will do everything that we can to 
see that anyone who wants to attend a community college is able 
to do so. 

There presently are really no entry restrictions, 
and the Board as a body has worked very hard for diversity 
within the student body, within the — at the instructor level, 
and certainly at board levels also. 

CHAIRMAN LOCKYER: Is there anyone present who'd 

wish to make any comment? I think we're probably ready to move 


CHAIRMAN LOCKYER: All right, motion to recommend 
confirmation. Call the roll. 

SECRETARY WEBB: Senator Ayala. 


SECRETARY WEBB: Ayala No. Senator Brulte. 
Senator Hughes. 


SECRETARY WEBB: Hughes Aye. Senator Lewis. 


SECRETARY WEBB: Lewis Aye. Senator Lockyer. 


SECRETARY WEBB: Lockyer Aye. Three to one. 


MS. THAKAR: Thank you. 

[SENATOR BRULTE later added an 
Aye vote, and the final vote was 
four to one for confirmation.] 

CHAIRMAN LOCKYER: Mr. Trigg is next on the list. 
How are you doing? 

MR. TRIGG: Fine, thank you. It's an honor to be 
here today. 

CHAIRMAN LOCKYER: Are you retired now? 

MR. TRIGG: Yes, I have retired. 

CHAIRMAN LOCKYER: Were you an active 


MR. TRIGG: Yes. 

CHAIRMAN LOCKYER: Did you want to open with any 
comments at all? 

MR. TRIGG: I think I would, if that's 
appropriate . 

I felt I would like to make, I think, three 
comments on my behalf and seeking your support. 

I think the first would be, I guess, dealing with 
the qualifications to serve on the California State Board. And 
the first would be the fact I do have 35 years' experience in 
public education in the State of California. Of that, I've 
taught at the junior high, and the senior high, and the 
community college, and the university level. I've worked as a 
counselor in a junior high and a senior high school, and in an 
urban setting. 

I have served as the vice principal and principal 
of a high school. I've served as the Associate Superintendent 
of the San Juan School District here and the Deputy 
Superintendent later. And then served as the Superintendent of 
Schools in Davis, and then moved from there to — my last 13 
years in public education I served as Superintendent of Schools 
for the Elk Grove Unified School District. 

I think in addition to that, I've had some state 
level responsibilities that I hope help qualify me for this. 
One of those would be, I served as the Chairman of the City 
Superintendents for the State of California for a year. I also 
served as the Chair of the Superintendents Association for the 
State of California for a period of three years. And served as 

the Chair of a reform task force for secondary education, where 
we published the booklet as a result of that called, "Second to 
None . " 

Secondly, I think the experiences I've had have 
been both urban and rural and suburban. And I think that has 
been an important factor to me. Serving as a high school 
principal, I served a student body that enjoyed a rich 
multi-cultural and multi-ethnic background. And the Elk Grove 
School District, as we grew very rapidly over the years, became 
a district of approximately 54-55 percent minority children, and 
we had 57 languages in our district. 

I guess the last point I would like to make on my 
behalf is really that — 

CHAIRMAN LOCKYER: Was it Davis or Elk Grove 
that had that? 

MR. TRIGG: Elk Grove. 

CHAIRMAN LOCKYER: Elk Grove has 57 languages? 

MR. TRIGG: Fifty-seven languages, that's 
correct. And about 55 percent of the children are minority, 
growing at about 2,000 to 2500 kids a year. 

I think the last one was, I believe very strongly 
in high academic standards for our children. I think we should 
be held — I think parents and agencies, school districts, 
professional staff, should be held accountable. We should have 
a rigorous academic program for all of our children. I think 
that's probably the greatest gift that we can give our young men 
and women when they leave our high schools, to be able to be 
prepared for employment, or to have the choice of employment or 


moving on to a college or university of their choice. 

That's my comment. 

CHAIRMAN LOCKYER: Questions? Senator. 

SENATOR HUGHES: In Davis, how many low 
performing schools did you have in Davis, if any? 

MR. TRIGG: In Davis, we had very few. 

SENATOR HUGHES: That's right. 

MR. TRIGG: Because when we had a Title One 
school, it was typically made up of the children of graduate 

SENATOR HUGHES: So, if their parents weren't 
doing well, they wouldn't have been there; right? 

MR. TRIGG: Probably. 

SENATOR HUGHES: What about in Elk Grove? Did 
you have any — 

MR. TRIGG: Absolutely. 

SENATOR HUGHES: Everything is comparative; 

MR. TRIGG: Absolutely. 

I think one of the things that really attracted 
me to the Elk Grove School District was their diversity. I felt 
they were becoming what the State of California is and is 
becoming, and I found that very challenging. 

So, absolutely, we had youngsters who did not 
meet the goals that we set for them, and that is something that 
we struggled with. 

SENATOR HUGHES: What did you do to bring about 
change to help them to meet those goals that you, as an 


educator, wanted? 

MR. TRIGG: I found, you know, after looking at 
this for many years, there's certain things you do by just doing 
it. By that, I'm saying we decided that we really needed to pay 
attention to those youngsters who were in the middle range and 
those youngsters who, perhaps, weren't achieving that. 

One of the things that we did is, I was very 
fortunate to have a board of education that allowed us to adopt 
very high academic standards, including algebra for all 
students. And it's not just a question of requiring the algebra 
for all students. It's a question of requiring and then seeing 
that they'll be successful. So, we tried to do our best to 
provide tutoring services and different approaches for the young 
men and women. 

And I'd say that, after we did this for a 
five-year period and studied it, as one example, after studying 
it, we didn't have one youngster that didn't graduate from an 
Elk Grove high school because of the inability to handle algebra 

SENATOR HUGHES: Were their parents able to help 
them at home? 

MR. TRIGG: In some cases, not all cases. Where 
they couldn't, we certainly encouraged it. We wanted to bring 
them along. That takes counseling; it takes a lot of effort, I 
think, on the part of your staff. It takes a little different 

Most of all, you have to believe that those kids 
can do it. You have to believe it, and then go after it and 


ensure them they can do it, and to let them know what doors are 
really going to be open for them. 

To me, the closer we can come to having 
youngsters qualified to go to college, all kids qualified to go 
to college, then we've really succeeded. The choice to do that. 
I don't think we should force them to go. 

SENATOR HUGHES: What do you think was part of 
your success in both of these school districts? Did you have 
the school board members with you as part of the team to make 
the difference, to reach your goals? 

MR. TRIGG: Absolutely. 


Now, let me give you a district that I have part 
of in my district, the Compton School District. What would you 
have done if you had been asked to be the administrator in that 
area, where the school board ran into great, great difficulty? 
What are your views? How do you think you could have gone about 
improving the school district that's in intensive care like this 
one is? 

MR. TRIGG: Well, number one, you don't do it 
alone. But I do think you help set the tone for what it is 
you're trying to get done. And I think you have a deep 
responsibility to help work with that board to help them set 
goals and then to go after these goals. 

I think you need to struggle for some stability. 
I think there's some basic things that are pretty fundamental to 
this. You know, are the kids reading? If not, why not? And 
then go after it. Do the children have books? If they don't 


have books / why don't they have books? And then go after it. 

And then to create, I think, a teaching 
environment where you can attract young men and women that would 
come into the profession and then do what you can to keep them 
there by providing an environment in the classroom that is one 
that's safe, and where they have the tools to really do their 

And SO/ I think all of that kind of put together, 
along with an enormous effort to bring families into the 
responsibility for educating their children. 

SENATOR HUGHES: Now, in a troubled district like 
Compton School District, people are picking up educational 
literature, and they're reading about wonderful institutions 
called charter schools. 

Do you think a charter school could work in a 
Compton? If so, why so? If not, why not? 

MR. TRIGG: Well, I think — let me think about 

SENATOR HUGHES: I know that's a loaded question. 

MR. TRIGG: No, that's perfectly all right. 

You know, I think charter schools are absolutely 
dependent upon the, like most any other school, on the quality 
of those people that are putting it together. 

So, I'm sure in that community there would be 
people that would be able to do this and do it effectively. The 
concern that I have on it, and I wanted to be sure that on the 
charter school, that there is a method of evaluating the 
effectiveness of what it is the youngsters are learning. 


But I think if it creates a bit of competition, 
that would be very healthy. I think it puts people in a 
position where they ask difficult questions about their 
schools. I think they should ask difficult questions about 
their schools. I think it would be more difficult than some 
places to do this, but I think it's doable. 

SENATOR HUGHES: Do you think we should expand 
the limit that we have now? We have 100, and a lot of people in 
various communities are saying we need more, more, more. 

Do you think we should just go about and expand 
the limit so that anyone who wants one can get one, like a 
McDonald's franchise or something like that? 

MR. TRIGG: No, I wouldn't be in favor of anybody 
that wants one could get one. 

But I would be in favor, when you think of 100 
schools in the state compared to the thousands of schools that 
are really available, that's not a tremendous number. If they 
can set an example whereby the rest of us could benefit from, 
then I'm saying I would have no problem with it. 

Again, though, I think we really need to be able 
to evaluate the effectiveness of those programs, and it's my 
understanding that we are conducting a study as we speak on 
that. That is my number one concern with the charters. 


CHAIRMAN LOCKYER: There are two charter 
districts now? 

MR. TRIGG: I believe so. 

CHAIRMAN LOCKYER: That's what our notes say. 


Does anyone know who the charter districts are? 

MR. TRIGG: I'm not sure. 

CHAIRMAN LOCKYER: You might have somebody over 
there phone me and tell me. 

MR. TRIGG: Okay. 


SENATOR AYALA: I have a couple questions. 

What is your position on public funding of 
private schools/ vouchers, K through 12? 

MR. TRIGG: Well, number one, I believe in 
competition. I think that's fair. I believe that any time 
anybody can set a good example for the rest of us. 

My problem is so far on the vouchers that I have 
seen, I don't feel that they have created a level playing field 
for that. I want to be sure that youngsters are not harmed by 
this process and can only benefit from it. 

I would be open to a voucher that I think in the 
future, if it were well developed that I could — 

SENATOR AYALA: Public funding for private 

MR. TRIGG: Public funding for private schools. 

CHAIRMAN LOCKYER: That would be a voucher that 
someone could use at a private school. 

MR. TRIGG: Yes. 

SENATOR AYALA: It doesn't matter how they're 
paid, but they're paid from public funds and private 

I mean, if you want to do that, I could start a 


1 store. 

2 MR. TRIGG: I would want to look at that very, 

3 very carefully. I really would. 

4 CHAIRMAN LOCKYER: What are the issues that made 

5 you feel it wasn't a level playing field, or defects in the 

6 proposals we've heard that you would remedy in what way? 

7 MR. TRIGG: Well, working in districts, I think, 

8 that had the rich diversity of youngsters, I'm very fearful of 

9 the impact that it may have on families who have great needs. 

10 I'm worried about those districts that are not functioning as 

11 well as they should. 

12 Now, I think there might be better ways of 

13 perhaps improving that. So, that's really, I think, the issue 

14 that I'm dealing with here. 

15 I think in terms of the funding and this type of 

16 thing that concerns me. 

17 SENATOR AYALA: I have a couple more questions. 

18 What has been your experience with the charter 

19 schools in terms of early success and failures? What has been 

20 the experience there as a board member? What do you hear about 

21 these schools? 

22 MR. TRIGG: As I mentioned earlier, one of the 

23 concerns I have is, I don't think we have a solid method of 

24 evaluating that. That's what I have been encouraging. I would 

25 like to have better information on that. 

26 One thing is to be able to say, well, I feel good 

27 about my charter school. That's with one level. 

28 The next level that I'm interested in is. 


demonstrate to me that young men and women or the children, are 
they reading better? You know, are they writing better? Are 
they computing better. 

SENATOR AYALA: We don't know that yet? 

MR. TRIGG: No, we don't know that. 

SENATOR AYALA: So, are you in favor of expansion 
of these schools, of charter schools? 

MR. TRIGG: I would be in favor of expanding it 
only if I felt it was a particularly goad charter and one, I 
think, that we could talk to them about evaluating. 

SENATOR AYALA: In terms of charter schools, 
whose responsibility is it to make sure that the students are 
well taken care of in school in terms of math and reading? 

MR. TRIGG: It's primarily the school district. 
Not even the school district, but it would be the agency that 
opened the charter school. 

SENATOR AYALA: Isn't the Board of Education 
responsible for every charter school within that school 

MR. TRIGG: We're responsible for the — 

SENATOR AYALA: Quality and the policies, and all 
that sort of thing, of running a charter school? 

MR. TRIGG: Well, we have a very indirect 
responsibility on that. 

SENATOR AYALA: I don't mean you. I'm talking 
about local school boards. 

MR. TRIGG: Okay, let's see if I understand the 


1 SENATOR AYALA: Whose responsibility is it to 

2 make sure that the charter schools are run properly? 

3 MR. TRIGG: The responsibility, as I understand 

4 it, of the charter school is the agency that applies and becomes 

5 the charter. That takes a good part of that responsibility away 

6 from the local school board. 

7 SENATOR AYALA: I was under the impression the 

8 school boards could delegate people for charter schools, but 

9 they never lose responsibility. 

10 We have a school district in Victorville that 

11 apparently the school board doesn't want anything to do with the 

12 charter school, and people are complaining about it. 

13 I was under the impression that school districts 

14 authorize charter schools and were under the auspices of the 

15 school boards? 

16 MR. TRIGG: That's not my understanding. 

17 SENATOR AYALA: It's not working in Victorville, 

18 I don't think. 

19 MR. LUCIA: The school board has to approve the 

20 charter. The school board approves the charter, and then it goes 

21 from there. 

22 SENATOR AYALA: They can never lose control, and 

23 apparently in the city of Victorville school district, they're 

24 not doing it. They just washed their hands of the whole 

25 thing. 

2 6 I'm very surprised. I was reading in the paper, 

27 I think it was Saturday, that that was taking place in the city 

28 of Victorville. 


That's one reason I'm not very happy about 
charter schools, because they have to be responsible to elected 
officials, and that's the school board. If the school board 
wants to authorize a charter school, I think it's fine and 
dandy, but they should never lose the responsibility. They can 
delegate, but not lose the responsibility. In some cases 
they're not doing it. 

CHAIRMAN LOCKYER: Did you want to jump into 

MR. LUCIA: Yes, Senator. 

Bill Lucia, the Executive Director for the State 
Board of Education. 

The State Board's primary role actually is in 
numbering the charters. That's the most significant role, as 
well as jointly approving a charter district with the State 
Superintendent when a whole school district and all the school 
sites in the district become a charter. 

With respect to accountability at the local level 
and making sure that the learning is actually happening, it is, 
in fact, a charter between the organizing agent and the local 
school district governing boards, and that's a compact, if you 
will. They are supposed to exercise oversight as a local school 
board over that school site. And they shouldn't be neglecting 
that whatsoever. 

That's something that really is something that 
would be interesting to forward on to the county Office of 
Education as well as to the State Board and the State 
Superintendent, if what you're saying is the local governing 


board is saying that they don't want to have anything to do with 
the charter. 

CHAIRMAN LOCKYER: Why don't you check? 

MR. LUCIA: Yes, we will. That was in 

SENATOR AYALA: If the local board refuses to 
accept the responsibility, then it falls back on the State 
Board? Someone has to be responsible. 

MR. LUCIA: I don't believe it is that way in 
statute, but we'll look into it and see. 

SENATOR AYALA: Would you do that for me? 

MR. LUCIA: Yes, absolutely, and we'll get back 
to you. 

SENATOR HUGHES: I'd like to ask this witness 
another question. 

You said the State Board's obligation and 
responsibility is in numbering the charters. You mean seeing 
that none goes over, none becomes 101 or 107 or 108? 

CHAIRMAN LOCKYER: There are about 118 now. 

SENATOR HUGHES: What do you mean by numbering 
them? Explain that to me. 

MR. LUCIA: It's exactly the way you described 
it. It is a primary role as well as in — there are some 
charters have started and then fallen apart. They either 
haven't gotten off the ground, or they've been shut down by the 
authorizing agency in the case of one down in Los Angeles where 
there was financial impropriety. 

Therefore, you no longer have the number, let's 


say hypothetically/ the number eleven no longer a functioning 
school, so the next time an application comes to be numbered, 
then the State Board gives it the subsequent number, one hundred 
and whatever. 

With respect to its other statutory 
responsibilities, it's supposed to also consider when there's a 
dispute at the local level between the local governing board as 
an agent that has authority to initiate a charter or the local 
county office of education. And then ultimately, that can be 
appealed to the State Board. 

But the only other function of the State Board in 
the charter creation process is in a charter district, and 
that's only with both a majority vote of the State Board of 
Education as well as the agreement of the State Superintendent 
of Public Instruction can a chartered district be established. 

SENATOR HUGHES: Mr. Trigg, how would you vote, 
if you really felt that this charter school was not effective, 
would you be a dissenting vote, even though you knew that the 
majority of the Board Members, of your colleagues, really 
believed that this charter school was worthy? Would you be a 
dissenting vote? 

MR. TRIGG: I would vote my conscience. 

SENATOR HUGHES: That's not what I asked you. 

MR. TRIGG: Yes. 

CHAIRMAN LOCKYER: I think it is. 

SENATOR HUGHES: Okay, you'd vote your 
conscience, okay. 

MR. TRIGG: And the answer to that is, yes, I 


would vote against it if that is the case. 

SENATOR HUGHES: Okay, that's what I wanted to 
hear from you. 

CHAIRMAN LOCKYER: Senator Lewis, did you have a 

SENATOR LEWIS: Did I understand that the State 
Board has the responsibility, above and beyond numbering, in 
terms of the allowance of charter districts as opposed to 
charter schools. 

MR. TRIGG: That's my understanding. 

SENATOR LEWIS: So, in reality, the only time 
that Senator Hughes' example would come into play would be in 
the creation of a charter school district. 

MR. TRIGG: That's correct. 

CHAIRMAN LOCKYER: I think they have a waiver 
process which lets it go above 100, which they would have to use 
that discretion. 

MR. LUCIA: Absolutely correct. That's the other 
one where you see the Board now more involved, and that is in 
considering in the waiver of that part of the statute, using the 
general waiver authority to go beyond the 100 statutory cap. 
The Board is then — has a further consideration in terms of the 
merits of the proposal to some degree. 

There is a legal question and a challenge as to 
how much the Board can get into the details of the proposal 
versus just determining whether or not they believe one 
additional charter, assuming that all the requirements of the 
law have been met — 


SENATOR LEWIS: How many times does the Board 
utilize that waiver authority? 

MR. LUCIA: Currently the numbering is, I think, 
in the 120s. So, that's not to say that 20 have gone above, 
because some have closed, but it's in the range of over a dozen, 
close to two dozen. 

SENATOR LEWIS: Didn't the Legislature authorize 
some additional charter schools? Didn't Senator Hayden have a 
measure? It didn't pass? 

MR. LUCIA: That would have been limited just to 
the L.A. Unified School Direct and the number, but that was an 
amendment that was separate and apart from the overall statutory 

SENATOR LEWIS: So, there's been no legislative 
authorization above the 100. 


CHAIRMAN LOCKYER: Except for waivers. 

MR. LUCIA: Except for waivers, and that's using 
the Board's general waiver authority. 

CHAIRMAN LOCKYER: Mr. Trigg, I'd be interested 
in your experienced reaction to the debate over the most 
efficacious expenditure of public moneys between class size 
reduction or longer school year? What are your thoughts, if you 
had to make a choice between those two, do you have a tilt? 

MR. TRIGG: Well, it's a very interesting 
question, of course, because the class size reduction is so 
popular with parents and teachers, and this type of thing. 

I think the research — and I'm delighted to see 


us do that, but on the other hand, we need a longer year, I 
think, for training of our teachers, and we also need a longer 
year for the -- I think we need a longer day as far, as that 
goes, and year for our children to be in school. 

So, I'm delighted that we have the reduction in 
class size, but on the other hand, I'm pleased to see us try to 
move in a direction of longer day, longer year. 

SENATOR HUGHES: What educational benefit is it? 
Some children learn faster than others. Should those children 
be penalized because you have other children who are slower? 
So, you just want a longer school year and a longer school day 
because that gives an administrator and custodians more time to 
be employed? 

CHAIRMAN LOCKYER: They're year around. 

MR. TRIGG: Yes. 

SENATOR HUGHES: How do you — 

CHAIRMAN LOCKYER: Let me answer because I 
started this. 

At least all the research that I've seen suggests 
that student performance increases as a direct function of the 
length of the school year. And that our school years are very 
short compared to most of the planet. 

Anyhow, that's the reason I asked the question. 

MR. TRIGG: Yes. And I think we should do 
whatever we possibly can to see that we try to alleviate that, I 
really do. It's a major — it should be a major thrust at the 
local level, I think, as well as the state. 

CHAIRMAN LOCKYER: I'm informed the two charter 


districts are Pioneer and Kingsburg, both in the San Joaquin. I 
don't know where Pioneer is. I know where Kingsburg is. 

Is there anyone present who wants to comment? 
Other questions from Members. 

I'm going to suggest that we not go to a vote 
today. I want to be honest about it, Mr. Trigg. I'm nervous 
about your responses on voucher. It sounded to me like there 
was too much opportunity for support of a voucher system in your 
philosophy, and I just won't vote to confirm people that have 
that view. 

I'd like let Senator Johnston be present, since 
he's ill today and wasn't able to be here. Since it's his 
district, and he strongly supports you, I think it's only fair 
to let him talk to us about those things. 

If that's okay, we'll just defer going to a vote 

MR. TRIGG: All right. 


MR. TRIGG: All right, thank you. 

CHAIRMAN LOCKYER: Ms. Tse, good afternoon. 

MS. TSE: Good afternoon. Senators. 

CHAIRMAN LOCKYER: What do you want to tell us? 
Something here to start? 

MS. TSE: Okay. My Name is Marina Tse. I have 
been a teacher for 20 years, and I have taught regular school, 
special education, and adult education. And I'm still 
practicing teacher at the Duarte High School District. 

I also see myself as a community person. Since I 


1 started 20 years ago -- actually I have been in this country for 

2 26 years, and I have been a volunteer in the community and 

3 founded and co-founded different organizations in helping the 

4 new immigrants, parents and students, to mainstresmi in 

5 educational system, and also help different educational 

6 organizations to promote quality education for kids. 

7 And being a teacher on the front line, I feel 

8 that I have the first-hand knowledge to offer to the Board, to 

9 share my opinions and what I observed, what works, what doesn't 

10 work in the school system. 

11 So, I believe that I could be an asset to my 

12 board. 

13 CHAIRMAN LOCKYER: We're just all pointing out 

14 here that one of your memberships is in the San Gabriel Valley 

15 Cult Exchange. 

16 We think probably somebody left off u-r-a-1, or 

17 cultural, or something like that, but probably not the Cult 

18 Exchange, is my guess. 

19 MS. TSE: Not a cult. Cultural. 

20 CHAIRMAN LOCKYER: All right. 

21 MS. TSE: Cultural Exchange. 

22 I'm not a cult member yet. 

23 CHAIRMAN LOCKYER: Let me ask you this question I 

24 was interested in with the last gentleman, and that's to just 

25 comment on voucher initiatives that you've seen on the ballot or 
2 6 otherwise were debated and discussed. 

27 Any philosophy or attitude about voucher 

28 education proposals? 


MS. TSE: I opposed the 174 several years back 
because I believe that the state has the obligation of 
overseeing that each student is being educated with the standard 
and also with the right assessment to them. 

So far, I have not seen any enforcement mechanism 
on the state level to protect the students from a cult member 
opening up a school. 

So, I think it's the people's decision, but I am 
interested in promoting the best quality education for public 

CHAIRMAN LOCKYER: The Board, I think, just 
adopted goals for this year, I believe, at a recent meeting. 
Does that ring a bell? What were the goals for 1997? 

MS. TSE: Yes. 

CHAIRMAN LOCKYER: What were the top ones? 

MS. TSE: Higher high school graduation 
standards, which is, I am all for it. Also class size 
reduction; that's one of them. 

And we also realize that the high school students 
need performing arts and sort of a higher standard. I think 
that's really — we really have to set up a higher standard for 

Being educated in Orient — we have 180 school 
days, and take away some of in-service days. As a teacher, I 
really see that that should be a priority also. It's on our 
priority, to try to get more days for the kids. 

In the Orient, our average is 250 days or more. 
When I went to school, we started at 8:00 o'clock, 8:00 to 4:00, 


1 and Saturday morning. That's why a lot of new immigrants — 

2 CHAIRMAN LOCKYER: Where did you go to school? 

3 MS. TSE: In Taiwan. 

4 j\nd a lot of new immigrants are asking the school 

5 system, how come we don't have Saturday morning school? 

6 CHAIRMAN LOCKYER: It was 8:00 to when? How late 

7 did it go? 

8 MS. TSE: From 8:00 to 4:00. That's average. A 

9 lot of countries have longer school days, and that's one of our 

10 goals, to try to have a longer school day in the year and higher 

11 standards. 

12 CHAIRMAN LOCKYER: Other questions. Senators? 

13 SENATOR HUGHES: What is your position on 

14 bilingual education? 

15 MS. TSE: If you look in my records, I have 

16 always supported bilingual education. 


18 MS. TSE: Because the new immigrants, they do 

19 need help with their own mother language. Especially older 

2 students, because English is my second foreign language, and I 

21 Ccime to this country when I was older, so I understand that they 

22 do need the help of bilingual education. 

23 However, you know, like all other programs in the 

24 process, we always have to look in to see what's working, what's 

25 not working. 

26 But I do support bilingual education. I think 

27 it's needed at this point. 

28 SENATOR HUGHES: How do you feel about a district 


like Compton, and the fact that we've had to have state 
intervention there? 

MS. TSE: I used to work in the South Central 
area in Los Angeles. 


MS. TSE: 98th Street Elementary School. 

SENATOR HUGHES: That's in my district. 

What would you have done for them? What did you 
do for them when you worked there? 

MS. TSE: I was an educational aid. But I am in 
special ed., which means I help the kids needing the most help. 

I feel that parenting education is the most 
important for students and achieve, because they need modeling, 
and they need extra attention from the teachers, especially from 
the parents. 

I have to use the term that everybody say, that 
it take a whole village to educate a child. And I could see 
that the most area needs help will be parenting. 

The Compton School District, it's — I think I 
would like to see that all elements, including the parents, and 
the private industry, the school system, all work together. 
That's really needed. 

SENATOR HUGHES: How do you feel about charter 

MS. TSE: I don't have too much knowledge on it 
because I'm new on the Board. But it's experiment that I'm 
waiting for the report, the result of the charter school, see 
how it works. 


1 If not anything, we can learn from the process 

2 because we do need changes in the state, the educational 

3 system. And whatever report it is, we can learn from all those 

4 reports what needs to be changed. 

5 SENATOR HUGHES: Although African-American 

6 students do not speak a foreign language per se, as we define 

7 it/ Los Angeles and Vallejo Unified School Districts have 

8 Instituted something known as the standard English program. 

9 How do you feel about the responsibility of 

10 teachers teaching African-American students to speak standard 

11 English? 

12 MS. TSE: The school I work at, we have a 

13 standard English program, so I actually see the program has a 

14 lot of success. 

15 The program is to teach Afro-American students 

16 standard English. Like, every month we have a Toastmaster 

17 Club, and the students stand up on the stage and speak standard 

18 English. That's coming from the standard English program. 

19 To me, it's a positive program. It was approved 

20 in 1984 by the State Board, and now the Department of Education 

21 is reviewing it to see if any changes need to be made. 

22 But I feel that it's a very positive program. 

23 It's teaching standard English, and I really would call for a 

24 lot of school districts to support the program, which I have 

25 said it on my board that I have a manual of it as a teacher. 

2 6 Maybe we need to revise some of the contents, but I think it's 

27 good for the students, and it has been helpful. 

28 SENATOR HUGHES: How do you feel about the 


voucher system? If someone in my community is not pleased with 
the local public schools, should I, as a State Legislator, go 
out and see if I can't get them a voucher? Since they don't 
like the neighborhood school, they could shop around and find a 
better school to send them to? How do you feel about that as a 

If you lived in a community where, say, your 
children didn't have what you considered a good school, would 
you pick up a voucher to send your children there, to another 

MS. TSE: I don't feel private schools are better 
than public schools. Often people ask me, should I send my kids 
to private school? 

I told them, I said that, you know, the public 
school has better teachers because we are credentialed. We also 
have a full core curriculum that we make sure — and also the 
state has the mechanism to make sure that all students are up to 
the performance. 

So, I would ask them to try to choose a public 
school maybe with a good performance. And that's why — and 
some how, choice school, if there's another opening for 
students, I don't object to that at all. 

But to the voucher, so far we do not have a good 
system to make sure they enforce all the regulation or 
standards, enforce the standards, and also make sure that they 
benefit kids yet. I don't see that. 

So, I don't see that the voucher system should be 
going to be implemented. 


1 SENATOR BRULTE: I have a question. 

2 You said you didn't support Proposition 174. Can 

3 you envision a voucher system that you could support? 

4 MS. TSE: Because 174 did not have a mechanism to 

5 ensure that every school has accountable for — responsible for 

6 students. And that's important, accountability model. 

7 SENATOR BRULTE: If there was a model in a 

8 voucher system that ensured accountability/ could you support 

9 that voucher system? 

10 MS. TSE: If the people choose to it, if I see 

11 the whole system would be working, it's iffy. I haven't thought 

12 about it. 

13 But it probably take a lot to convince me as a 

14 public school teacher. I'm more interested in promoting public 

15 school/ not promoting — improving our public school system. 

16 But I do need to see a very complete mechanism 

17 to make sure that the students are getting the right education. 

18 CHAIRMAN LOCKYER: Senator Ayala. 

19 SENATOR AYALA: I was just going to ask yoU/ did 
2 you say that you knew two foreign languages besides Chinese? 

21 MS. TSE: I speak Chinese/ but I speak many will 

22 dialectS/ three dialects in Chinese: Mandarin, Cantonese, and 

23 my own home town. 

24 SENATOR AYALA: Do you know a number of foreign 

25 languages as well? 

2 6 MS. TSE: No, I'm sorry, only Chinese. Chinese 

27 and English. It took me 26 years to learn English. 

28 SENATOR AYALA: One of the questions I asked 


Mr. Trigg, what is your position on using public funds for 
private schools vouchers, K through 12? These are public funds 
to use for private enterprise. Do you support that? 

MS. TSE: Not at this point, because at this 
point I really have not seen any system, any design, that will 
hold a private school or voucher school accountable for it. I 
have not seen that happening. 

So, no, at this point no, I would not support. 

SENATOR AYALA: Do you think you have enough 
experience with charter schools to make up your mind whether 
they're succeeding or failing at this point? Charter schools as 
we know them today. 

MS. TSE: I have heard pro and con, you know, by 
talking to different teachers in the Los Angeles area. They 
have to give us a full report. We don't have the report yet. 

But I'm thinking, if they don't improve at the 
end of the year, at the end of the five-year cycle, they have to 
be dropped, drop out. 

SENATOR AYALA: But if the local school boards 
are not overseeing their functions, how do you know they're 

MS. TSE: They are supposed to oversee their 

SENATOR AYALA: But they're not. What happens if 
they don't? 

MS. TSE: At the end of the fifth year cycle, if 
they failed, then the state would drop them. They cannot be 
charter schools any more. 


SENATOR AYALA: Knowing what you know about 
charter schools, would you support expansion of the charter 
school system? 

MS. TSE: Not if it is really necessary. If I 
see unique cases with the support of Ms. Eastin, a lot of times 
they would give us a reason why we support this, for whatever 
good reason. I have to see a good reason for it. 

SENATOR AYALA: You don't think there's enough 
track record to make a determination at this point about the 
successes of charter schools? 

Yet we have some people who want to expand them, 
and I'm told we don't have enough experience to do that. 

MS. TSE: I haven't seen it being expanded too 
large either, because we have 7,832 schools, and now we have 
118, and also spread out within 1,000 school districts. So, 
not every school district experiencing it. 

So, I also haven't seen a lot of waivers for it, 
so it's not exactly expanding, but I would look into why it's 
needed to add to it. 

SENATOR AYALA: It seems to me we don't have 
enough experience today. Yet, two years ago, we expanded the 
number of schools. I voted no. I don't think we knew enough 
about them. We don't know enough about them today, yet we were 
expanding those schools. There's probably another bill to do it 

But anyway, thank you for your testimony. 

SENATOR HUGHES: May I ask a question? 

You're a graduate of Cal State L.A.? 


MS. TSE: Yes. 

SENATOR HUGHES: Do you know they have a charter 
school? Do you know anything about their charter school? Do 
you know they have charter school there on the campus? 

MS. TSE: I know they have an arts high school. 

SENATOR HUGHES: No, not the arts. High School. 
They have charter school that teaches elementary students. 

Did you know anything about it? 

MS. TSE: NO/ I'm sorry. But I graduated in 

SENATOR HUGHES: But I'm telling you that you 
need to know that the university you graduated from has now a 
charter school. 

Would you, as a Board Member, not be looking into 
seeing how effective that is, and that's tied in with that 
university campus? 

MS. TSE: I would love to. I should go. 

SENATOR HUGHES: I'm saying that to say the 
charter schools that I know that have been most successful are 
those that are tied into a university campus. 

So, I might suggest to you, as you pursue your 
goal, that you look into Cal State L.A. 's charter school to 
evaluate what you think that's all about. You might even visit 

MS. TSE: Yes, thank you for the suggestion. 
Actually, I only live about two miles from Cal State L.A. I 
love to go to visit a charter school there. 

SENATOR HUGHES: Okay, thank you. 


CHAIRMAN LOCKYER: Other questions? Anyone 
present that wishes to comment? 

MS. KINKOR: Good afternoon, Mr. Chairman 
Members of the Board. 

My name is Ann Kinkor, and I am a parent of four 
boys: Michael, Patrick, Kevin and Sean — sounds Irish enough 
-- three of whom have epilepsy. 

I have a personal knowledge of this fine woman 
because I served on the State Special Education Commission with 
her. And I would like to say as an adjunct comment that through 
my years on the Commission, I came to know Ms. Hughes, 
Mr. Lockyer, Mr. Ayala, and I want to thank you as a parent for 
all of your support of special ed., particularly the deaf 

But my comments, I thought you might like to hear 
them because I had the privilege of working with Ms. Tse. And 
we both served as Program Chair of the Commission together. And 
I want to tell you that we both came from different perspectives 
in our experience. 

But I always knew that Marina had some very fine 
qualities that she certainly demonstrated to the Commission. 
First of all, when an issue was presented to the Commission, 
such as, say, what's the least restrictive environment policy, 
she would go to great lengths to understand it, to ask questions 
on all sides of the Commission and constituencies. 

I also felt that in each and every instance where 
there was an issue before the Commission, she always asked about 
the evaluation component of that issue or that program, and 


lastly, accountability. 

I was very, very impressed with the work that she 
did on the Commission, and how hard she worked. I think if 
anyone of you followed her around for one day, you'd be 
exhausted because she's a high energy person that's so dedicated 
to children. 

And while I can unanimously say from a viewpoint 
of the Epilepsy Foundation of America, whom I represent here 
today, we support her 100 percent. And while not all parents 
have the money to come here, some of them asked me to convey 
their comments to you. 

One of them was Mr. Comar, who's the State 
Coordinator for the Children with Attention Deficit Disorder. 
Their organization strongly supports the dedication that Marina 
has given to children with attention deficit. 

Also, Mr. And Mrs. Drake Kennedy, who are 
representative of the Federation of Families of Children's 
Mental Health. They asked that I convey strong support on 
behalf of that organization, and also the team of Advocates for 
Special Kids. 

Collectively, all of our organizations represent 
probably 400,000 to 500,000 parents in the State of California. 
And in each and every instance where this fine woman has been 
asked to address issues related to special education and 
children with disabilities, she's done it with sensitivity, with 
caring, with a thorough understanding of the issue, and she has 
truly voted her conscience. 

So, on behalf of all of us parents, all of the 


1 kids we represent, I want to ask that you confirm Marina as a 

2 Member of the Board of Education. 

3 And I thank you for giving me the opportunity to 

4 speak to you. I was very nervous. Thank you very much. 

5 CHAIRMAN LOCKYER: Thank you, you've done fine. 

6 What's the pleasure of the Committee? Senator 

7 Lewis. 

8 SENATOR LEWIS: Not withstanding the rather 

9 compelling testimony of the last witness, I still think I need a 

10 little more time to reflect on it. I would ask the courtesy to 

11 put this over. 

12 CHAIRMAN LOCKYER: We do that automatically when 

13 a Member wants a week's delay. 

14 But we've concluded the hearing. Thank you for 

15 your comments. We appreciate them, and we'll stay in touch. 

16 MS. TSE: Thank you. 

17 [Thereupon. This portion of the 

18 Senate Rules Committee hearing was 

19 terminated at approximately 3:17 P.M.] 

20 — ooOoo — 


I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 


day of C^J^.^g>2,J^ , 1997. 


Shorthand Reporter 


Additional copies of this publication may be purchased for $3.25 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1020 N Street, Room B-53 

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MAY 1 3 1997 






ROOM 113 


MONDAY, APRIL 7, 1997 
2:12 RM. 


Reported by 




ROOM 113 


MONDAY, APRIL 7, 1997 
2:12 P.M. 

Evelyn J. Mizak 
Shorthand Reporter 











GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NANCY MICHEL, Consultant on Governor's Appointments 


Deuel Vocational Institution 
Department of Corrections 

RICHARD L. TATUM, State President 

California Correctional Supervisors Organization 

California State Prison 
Salinas Valley 

ROY MABRY, State President 

California Association of Black Correctional Workers 


Chicano Correctional Workers Association 



Citizens Advisory Committee, CTF-SVSP 

California State Prison, Folsom 
Department of Corrections 


1 ANTHONY C. NEWLAND, Ph.D., Warden 
California State Prison, Solano 

2 Department of Corrections 

Private Company with Joint Venture Program 


DAVID MADDOCK, Interim Director 
5 California Department of Corrections 






Proceedings 1 

Governor's Appointees: 


Deuel Vocational Institution, Tracy 

California Department of Corrections 1 

Background and Experience 1 

Witness in Support: 

RICHARD TATUM, State President 

California Correctional Supervisors Organization 3 

Questions by SENATOR AYALA re: 

Facility at 200 Percent Capacity 6 

Staff Transferred from San Quentin Due 

to Sexual Harassment Problem 6 

Recent Flooding and Evacuation of 

Institution 8 

Over-time Management at Institution 9 

Use of Permanent Intermittent Employees 10 

Questions by SENATOR LEWIS re: 

Number of Homicides at Deuel in 

Recent Years 10 

Questions by CHAIRMAN LOCKYER re: 

Any Changes in Management Due to 

Federal and State Changes in Credits for 

Inmates 10 

What Works in Reading Programs 11 

Motion to Confirm 12 

Committee Action 12 

California State Prison 
Salinas Valley 13 

Background and Experience . 13 

Questions by CHAIRMAN LOCKYER re: 

Uniqueness of Salinas Valley 14 

Impact of Change in Family Visits 

Policy 15 

Questions by SENATOR AYALA re: 

Classification of Institution as 

Level IV and I 15 

Transferring Staff from Other 

Institutions to Salinas Valley 15 

Questions by CHAIRMAN LOCKYER re: 

Experience at Corcoran State Prison 16 

Comments on Design of Salinas Valley 16 

Feasibility of Mega Prison 17 

Witnesses in Support: 

ROY MABRY, State President 

California Association of Black 

Correctional Workers 18 


Chicano Correctional Workers Association 18 


Citizens Advisory Committee 



California Correctional Peace Officers 

Association 20 

Questions by CHAIRMAN LOCKYER re: 

Need to Update System of Classifying 

Inmates 2 3 

Questions by SENATOR AYALA re: 

Problems with Illegal Use of 

Drugs in Institution 23 

Motion to Confirm 24 

Committee Action 24 



California State Prison, Folsom 

California Department of Corrections 25 

Background and Experience 25 

Questions by CHAIRMAN LOCKYER re: 

Differences in Levels of Classification 26 

Types of Inmate Programming 26 

Assembly Bill that Would Require Inmates 

to Work 40 Hours a Week 27 

Questions by SENATOR AYALA re: 

Over-time at Folsom 28 

Percentage of Permanent Intermittent 

Employees Used in Correctional Officer 

Capacity 29 

Questions by SENATOR LEWIS re: 

Press Reports about Fumes Causing 

Health Problems for Officers 30 

Witness in Support: 


California Correctional Peace Officers Association ... 31 

Questions by SENATOR AYALA re: 

Mysterious Illness Affecting Those 

in Vicinity of Tower 21 32 

Motion to Confirm 34 

Committee Action 34 


California State Prison, Solano 

California Department of Corrections 34 

Background and Experience 34 

Witness in Opposition; 


Private Company with Joint Venture Program 3 6 


Questions by CHAIRMAN LOCKYER re: 

'Number of Prisoners in 
Program 37 

Main Recurring Problem 38 

Questions by CHAIRMAN LOCKYER re: 

Types of Support Services 38 

Types of Industries 39 

External or Internal Use of Laundry 39 

Hardest Part of Job 39 

Motion to Confirm 40 

Questions by CHAIRMAN LOCKYER re: 

Lessons Learned as Parole Agent to 

Help Policy Makers 40 

Questions by SENATOR AYALA re: 

Gross Profits for Solano Prison 

Industries 41 

Response by DAVID MADDOCK, Interim Director 
California Department of Corrections 42 

Committee Action 4 3 

Termination of Proceedings 43 

Certificate of Reporter 44 

— ooOoo — 

CHAIRMAN LOCKYER: Now we get to tab three, 
gubernatorial appointees. 

I apologize to those who have been waiting and 
standing. Unfortunately, this is the only room available we 
have for these meetings at this time. 

I guess we'll start with Mr. Alameida. Good 
afternoon, sir. 

MR. ALAMEIDA: Good afternoon. Senator. 

CHAIRMAN LOCKYER: Looks like you may have a 
comment to begin with. That'd be appropriate. 

MR. ALAMEIDA: If it's okay. 


MR. ALAMEIDA: Good afternoon. Senator Lockyer, 
Members of the Committee. 

I'd like to thank you very much for giving me 
this opportunity to appear before you to present my 
qualifications for the position of Warden at Deuel Vocational 

My commitment to the public service now 
approaches 25 years, nearly 24 of which have been dedicated to 
the Department of Corrections. I'd like to share the more 
relevant aspects of my education and experience with you. I 
know you already have copies of my resume, so I will only 
highlight that experience which bears directly upon my 
responsibilities as the Warden at Deuel Vocational Institution, 

From 1990 to — excuse me, from 1980 to 1984, I 

1 had the opportunity to be the Department's budget manager. As 

2 such, I was responsible for the development, coordination, and 

3 management of the Department of Corrections budget. 

4 As the Associate Warden for Business Services at 

5 both Folsom State Prison and the California Medical Facility at 

6 Vacaville, I was responsible for managing the budgets of two of 

7 the country's largest prisons. For example, during the time 

8 that I served at Folsom, I was responsible for a budget of $140 

9 million, serving 7300 inmates and 2200 staff. 

10 You know, they said that you wouldn't get dry 

11 mouth here, and I didn't believe them. But I tell you the 

12 truth, you do. 

13 CHAIRMAN LOCKYER: We'll help you out. 

14 MR. ALAMEIDA: During my tenure at both of these 

15 prisons, my responsibilities included the activations and 

16 business management of CMS South, now known as CSP Solano, and 

17 New Folsom, now known as CSP Sacramento. Although my experience 

18 is extensively financial and administrative, as the Chief Deputy 

19 Warden at Folsom State Prison and Chief Deputy Warden at Deuel 

20 Vocational Institution, I was directly responsible for the 

21 management of inmate housing, inmate self-help, and religious, 

22 programs, the academic and vocational training programs, and our 

23 accredited independent schools, victim services projects, and 

24 community services. 

25 After the departure of the previous DVI Warden in 

26 December of 1995, I was the acting warden until my appointment 

27 by the Governor in June of 1996. As a warden, I am responsible 

28 for managing all of the public safety and public service 

activities of the institution for 3800 inmates, 980 staff, and 
an operating budget of $68 million. 

I'm honored to have been appointed by the 
Governor to this position, and I committed to the Governor and 
to the people of California to bring the best of my experience 
and training to this job. 

I am equally honored, and a little bit nervous as 
you can tell, to have the opportunity to appear before you today 
for your consideration and evaluation. 

Thank you for this opportunity, and I'll be happy 
to answer any questions you may have. 


Let me ask also if there's anyone present who'd 
wish to comment? We're always willing to hear those matters. 
Yes, sir please. 

Good afternoon, sir. 

MR. TATUM: Hi, gentlemen. I'm Richard Tatum. 
I'm the State President of the California Correctional 
Supervisors Organization. A little nervous, too. 

But basically, I'm a correctional lieutenant at 
Sierra Conservation Center in Jamestown. I've been a supervisor 
about 24 years out of my 29 years with the Department of 

With that, give you a little background on our 
organization, our organization's been in existence about five 
years. And basically what we do is, we represent the sergeants 
and lieutenants and correctional supervisors with the Department 
of Corrections. We started that as there was a need for 

1 somebody to represent our folks. And we started/ like I say, 

2 five years ago, and that's what we do now. 

3 Basically, the reason that we're here is to 

4 support the people that support our people, and also people that 

5 we feel are the type of people that we'd like to see as 

6 wardens. 

7 Mr. Alameida is one of the people that we feel is 

8 the type of folks that -- what we want. Mr. Alameida supports 

9 his supervisory people. I myself worked eight years at DVI in 

10 Tracy as a sergeant, 1973 to 1981. I know a lot about Tracy and 

11 how it operates. I know a lot of folks there that are still 

12 there. At that time, during those years, it was the most 

13 violent prison in the whole state and probably the country. Ran 

14 about — during the eight-year period I was there, there was 55 

15 homicides during that period of time. It was a very violent 

16 place. 

17 DVI, like I say, has changed over a lot. The 

18 whole gender of the institution and the Department of 

19 Corrections has taken on a different view now. 

20 Mr. Alameida is very accessible to his people. 

21 He has an open door policy which we like, to be able to talk to 

22 folks. Even though he doesn't have maybe the line experience 

23 that we've talked about, in fact, me and Senator Ayala talked 

24 about this a while back, about the line experience and things, 
2 5 but I think that along with that line experience that you have, 
2 6 you need to have the ability to communicate with your staff and 
2 7 understand what's going on inside the institution. 

28 We feel that he's that type of person. We are 

real happy, our organization iS/ with the quality of the type of 
wardens that they've put forward, each one of these folks that 
they've put up for this confirmation. So, we're going to be 
speaking towards each one of them in a positive note. 

CHAIRMAN LOCKYER: Why don't I just note that for 
the record with the next three? 

MR. TATUM: You could do that. 

CHAIRMAN LOCKYER: Unless you have a particular 
thing to add. 

MR. TATUM: No, basically, you know, I've 
submitted a letter here to you concerning these folks. And each 
one of them, I'm saying, we're real apprehensive and in actually 
speaking forward on folks that we feel wouldn't meet that. 

But Mr. Mueller, and Mr. Lindsey and Mr. Alameida 
and these folks are the type of people that we're real pleased 
with the Department's selection on these folks. It's the type 
of wardens that we need. 

Like I say, I've gone through a lot of — in my 
time, gone through a lot of wardens, a lot of directors in my 
career. Like I say, Mr. Alameida 's the type of person that this 
Department of Corrections, with all the things that are going on 
with it right now, this is type of person that we need. We feel 
he's basically a very ethical person, and the Department of 
Corrections needs some ethical people. 

I guess that's about. 

CHAIRMAN LOCKYER: Well, additionally, he's going 
to have to be the Director in the next administration. He 
doesn't know that yet. 

1 [Laughter.] 

2 MR. ALAMEIDA: I don't have enough life savers, 

3 Senator. 


5 Senator Ayala, did you have a question? 

6 SENATOR AYALA: I have a couple of questions. 

7 I have note that the facility's over 200 percent 

8 capacity, Deuel Vocational Institution. Is that where you're 

9 the warden? 

10 MR. ALAMEIDA: Yes, Senator. 

11 SENATOR AYALA: That is over 2 00 percent capacity 

12 in terms of inmates in place there? 

13 MR. ALAMEIDA: That's correct. Senator. We have 

14 inmates in all of our cells, in day rooms, and in our gymnasium. 

15 SENATOR AYALA: Do you have an individual on your 

16 staff that was transferred from San Quentin because of a 

17 harassment problem? The Supreme Court agreed to a $1.3 million 

18 cost to the taxpayers as a result this individuals that's on 

19 your staff now. 

20 How do you expect to handle that individual as it 

21 pertains to female colleagues? How do you monitor an 

22 individual like that. 

23 MR. ALAMEIDA: I don't believe I've had anybody 

24 transferred from San Quentin with that type of background. 

25 SENATOR AYALA: We have a record here where it 

26 appears you have on your staff an individual transferred from 

27 San Quentin State Prison. The State Supreme Court recently let 

28 stand a $1.3 million sexual harassment damage award to a female 

correctional officer who had been harassed by this individual. 

I don't want to give you the name in public, but 
I do have the name if you want it. 

Are you not aware of that? 

MR. ALAMEIDA: I'm aware of a manager who 
transferred from Central Office Planning and Construction 
Division to Deuel Vocational Institution who worked at San 
Quentin and who may be the name of the individual that you're 
referring to. 

If that is indeed the individual, prior to his 
coming to Deuel Vocational Institution, he and I had a 
three-and-a-half hour meeting in which I — at that time I set 
the expectations I have of managers, whether they be he or 
anyone else who works at Deuel Vocational Institution. 

We're very pro-active at that institution in 
terms of making sure that those expectations are set. We do 
training on an annual basis which is mandatory. We visit the 
site of the institution on a frequent basis. 

We do not take any latitude with individuals who 
violate the policies of sexual harassment prevention at the 
institution. We are very pro-active in terms of investigating 
matters and dealing with those individuals who don't follow that 

I think if you will speak to the individuals who 
work at Deuel Vocational Institution, you'll find that that is 
the case. We have a very active EEO program there, and we have 
access to individuals who represent our EEO within the 
institution, whether it be myself, the Chief Deputy Warden, 


1 other managers in the institution, or line staff on all watches. 

2 So, I think, Senator Ayala, that we do a good job 

3 at DVI about that. 

4 SENATOR AYALA: As you well know, we are 

5 experiencing a lot of problems with the Department of 

6 Corrections and Youth Authority. We don't need those kind of 

7 problems. 

8 MR. ALAMEIDA: I agree. 

9 SENATOR AYALA: With the recent floods, you had 

10 to move the inmates from that institution away from the flooding 

11 waters that approached the prison? 

12 MR. ALAMEIDA: Yes, we did. We moved 

13 approximately 1100 inmates to other reception centers throughout 

14 the State of California. We also moved 1400 head of our dairy 

15 farm at the same time. 

16 We were gradually becoming an island. We were a 

17 peninsula with water on three sides of the institution. And for 

18 a period of about 10 to 15 days, staff throughout the 

19 institution did an exemplary job to prepare us for the 

20 eventuality of a flood, which actually didn't happen, so we were 

21 very pleased to see that. 

22 SENATOR AYALA: Your folks responded to that 

23 major task in good shape? 

24 MR. ALAMEIDA: Extremely well. Senator. 

25 SENATOR AYALA: Is that going to be a condition 
2 6 we're going to be experiencing every time we have a flooding 
27 condition in that area? 

2 8 MR. ALAMEIDA: I hope not. 

SENATOR AYALA: I do, too, but I mean, why this 

MR. ALAMEIDA: Well, we're in a flood plain at 
Deuel Vocational Institution. In 1983, we were flooded as well 
from the east side of the prison. At that time, there was some 
construction done to build a levee in the institution to prevent 
the waters from going into the farmer's land that is adjacent to 
the institution. 

Unfortunately this time, as you're well aware, a 
number of levees broke throughout the rivers of California. In 
this case, it broke on the south side of the institution and 
started to flood us from that direction. 

I can't tell you whether acts of God will affect 
us each and every year. I pray it doesn't. One time was enough 
for me, but I do know this, that given the fact that we've gone 
through this this time, we're well prepared for it should it 
happen again. 

SENATOR AYALA: Your institution appears to 
manage the over-time and sick leave pretty good, normally 
compared to our institutions. However, in August, you had 
174,582 for that month, and then you jumped to 345,889. 

Why did that occur? 

MR. ALAMEIDA: We were doing training in that 
particular month relative to the mental health program, where we 
had to train all of our staff on, I think, it was an eight-hour 
segment on mental health, where there was suicide prevention, 
dealing with inmates with mental health problems, how to 
associate those and get those individuals to proper care and 


1 treatment. So, that was a special program which raised the 

2 over-time in IST, in-service-training, at that time. 

3 SENATOR AYALA: Do you take advantage of the 

4 permanent intermittent employees, so-called PIEs, to help you 

5 with the over-time at that institution? 

6 MR. ALAMEIDA: Yes, I do. Senator, actively. 

7 SENATOR AYALA: That's all I have for now, Mr. 

8 Chairman. 

9 CHAIRMAN LOCKYER: Senator Lewis. 

10 SENATOR LEWIS: I was struck by the prior witness 

11 saying that he was at the Tracy facility for eight years, and 

12 during that time, I think it was back in the '70s, there were 

13 55 homicides. 

14 I'm just curious in the last few years how that 

15 compares? 

16 MR. ALAMEIDA: We haven't had any. Senator. 

17 SENATOR LEWIS: In what period of time? 

18 MR. ALAMEIDA: No homicides. Senator, in the last 

19 few years. 

20 SENATOR LEWIS: Thank you. 

21 CHAIRMAN LOCKYER: Can you inform us as to 

22 whether there's been any change in your capacity to manage the 

23 population in the institution because of our both federal and 

24 state changes in credits, good time, work time, ed. credits? 

25 Does that seem to make any difference in your responsibilities? 

26 MR. ALAMEIDA: It's probably affected us most, 

27 Senator, in our reception centers, since half of Deuel 

2 8 Vocational Institution, for the most part, is a reception 


center. So, our intake has increased dramatically. 

I can't necessarily say to you that it's fully 
associated with the change in good time credits, the three 
strikes law, or other policy changes in the State of California, 
but I do know that our intake is up. That's one of the biggest 
difficulties we have in managing that influx from week to week • 
and month to month. 

CHAIRMAN LOCKYER: But no extraordinary problems 
in just keeping the institution stable and safe? 

MR. ALAMEIDA: No, Senator, we do not. 

CHAIRMAN LOCKYER: As I recall, you have an 
active reading program at Deuel. Have you reached any 
conclusions from your various experiences about what works in 
teaching inmates to read and prepare for work outside? 

MR. ALAMEIDA: I think we have a policy at Deuel 
Vocational Institution that education is foremost. 

When an inmate comes into our reception center or 
comes into our institution, they're tested in terms of their 
reading level. If they haven't attained a ninth grade reading 
level, then whether they are in an assignment or scheduled to go 
into an assignment, if an opening arises in our education 
program, that's where they'll be placed until they have achieved 
a ninth grade reading level. 

So, we get many inmates who are facilitated 
through the academic program or the vocational program in that 
means, some of whom do not appreciate that, but I think in the 
long term, it serves us all well to do that. 

CHAIRMAN LOCKYER: What kind of a waiting list do 


1 you have? 

2 MR. ALAMEIDA: Right now, our waiting list is 

3 around 25 in the academic program. We have a number of academic 

4 classes yet to establish as part of a recent activation, and 

5 we're in the midst of doing that. 

6 CHAIRMAN LOCKYER: Other questions? What's the 

7 pleasure of the Committee? 

8 SENATOR LEWIS: Move confirmation. 

9 CHAIRMAN LOCKYER: We have a motion by Senator 

10 Lewis to recommend confirmation. Call the roll, if you would. 

11 CHAIRMAN LOCKYER: Did you want to conclude in 

12 any way, or do you mind if we just get this over with? 

13 MR. ALAMEIDA: I don't mind at all. Senator. 

14 SECRETARY WEBB: Senator Ayala. 


16 SECRETARY WEBB: Ayala Aye. Senator Brulte. 

17 Senator Hughes. Senator Lewis. 


19 SECRETARY WEBB: Lewis Aye. Senator Lockyer. 


21 SECRETARY WEBB: Lockyer Aye. Three to zero. 

22 [Later in the hearing. Senator 

23 Brulte returned and added his 

24 aye vote, making the final vote 
2 5 four to zero for confirmation.] 
2 6 CHAIRMAN LOCKYER: Good luck, sir. 

27 MR. ALAMEIDA: Thank you, Senator. 

2 8 CHAIRMAN LOCKYER: Okay, Mr. Lindsey is next. 


Salinas Valley. 

Good afternoon, sir. 

MR. LINDSEY: Good afternoon. 

CHAIRMAN LOCKYER: Did you want to begin with any 
opening comment? 

MR. LINDSEY: Yes, I want to thank you, Mr. 
Chairman, and the Members of the Committee for allowing me to 
appear here today. 

My name is a Gary Lindsey. I have 32 years in 
the Department of Corrections. I began in 1965 as a 
correctional officer at the California Men's Colony. While as a 
correctional officer, I completed my Associate of Arts degree 
and Bachelor of Science degree. 

I've worked at seven institutions. I've been 
involved in activation of four. I've been involved in almost 
every institutional peace officer rank that there is. I was 
appointed as Acting Warden at the Salinas Valley State Prison. 

CHAIRMAN LOCKYER: What did you start at? 

MR. LINDSEY: Correctional officer. 

As I said, I was appointed as Acting Warden in 
April of 1996. I have approximately 13 years at management 
level within the CDC. 

CHAIRMAN LOCKYER: We have a little background 
work that's done, as you probably know. I guess there were a 
number of issues that were raised when they were on site, but 
they seem to mostly be matters that are collective bargaining 
issues . 

MR. LINDSEY: That's correct, sir. 


1 CHAIRMAN LOCKYER: And I guess those are matters 

2 being discussed in a sort of more general context, not just your 

3 prison facility: budgets, and staffing patterns, and so on. 

4 Is there anything like that that you find unique 

5 or unusual to Salinas Valley? Is the culture different in that 

6 prison than other places you've served? 

7 MR. LINDSEY: Well, Salinas Valley State Prison 

8 is totally a Level IV except for a small Level I facility. As 

9 you can imagine, our Level IVs are some of the most active 

10 acting out inmates that we have. 


12 MR. LINDSEY: That is probably one of the unique 

13 things to it. 

14 It is a state of the art institution, and it has 

15 two sides to the Level IV. And then, in dealing with the 

16 staffing that come aboard, training them to deal with that type 

17 of inmates. 

18 CHAIRMAN LOCKYER: So, in that respect there's 

19 different staffing needs and so on? 

20 MR. LINDSEY: To some degree, yes, sir. All 

21 correctional officers go through the academy, the basic academy, 

22 and complete that. Then they come on grounds and they go 

23 through a 40-hour institution familiarization at the 

24 institution. 

25 Other than your administrative segregation cases 

26 or your special housing cases, there are no other specialized 

27 training except for your CERT, or negotiation management team. 

2 8 CHAIRMAN LOCKYER: Have you found that the change 


in family visits policy has any noticeable impact on prison 

MR. LINDSEY: I have inmates that appeal it. 
They talk to me when I'm on the yard and such about it. They're 
not happy about it, but to say that it's had a tremendous 
negative impact, no it has not. 

CHAIRMAN LOCKYER: You can't see any change? 

MR. LINDSEY: At this time. We've only been open 
eleven months, sir. 

CHAIRMAN LOCKYER: Other questions from either 
Senator Lewis or Ayala? 

SENATOR AYALA: Your institution is classified as 
a IV? 

MR. LINDSEY: Yes, sir. 

SENATOR AYALA: Maximum security with a Class I 
as well? 


SENATOR AYALA: And its a fairly new institution. 
How old is it now? 

MR. LINDSEY: We've only received inmates eleven 
months, sir. 

SENATOR AYALA: You didn't have a chance to 
encounter any problems there yet, have you? 

MR. LINDSEY: Well, like all institutions, you 
have some difficulties. 

SENATOR AYALA: Are they being transferred from 
other institutions to this one here? 

MR. LINDSEY: Yes, they have. Approximately 62 


1 percent of my staff came out of the academy as far as 

2 correctional officers. The rest were transfers. 

3 SENATOR AYALA: I don't have any more questions. 

4 CHAIRMAN LOCKYER: I note you were an Associate 

5 at Corcoran. 

6 MR. LINDSEY: Yes, sir. 

7 CHAIRMAN LOCKYER: Which, of course, is often in 

8 the news these days. 

9 What was your experience at the prison? Would 

10 you have expected the problems to have come up that have been 

11 commented on in recent months? 

12 MR. LINDSEY: No, I wouldn't have expected it, 

13 because in my time there, I looked at every incident package 

14 that came through me as Associate Warden. My staff monitored 

15 it, and I was very proud of the staff there, worked very hard. 

16 You always have some problems, but for it to get 

17 to the size of the allegations that I hear, no, I wouldn't have. 

18 CHAIRMAN LOCKYER: Since you're operating one of 

19 the newer facilities, could you share any thought or comment 

20 about design things? Just sort of generally, not necessarily 

21 where the light plug is, but just things we ought to know about 

22 the design of the facilities. Are there good or bad things that 

23 we ought to think about when we do the next ones? 

24 MR. LINDSEY: There's a lot of issues on design, 
2 5 but issues that I would think you and your Committee might be 

26 considering is the electric fence and how it's faring. 


2 8 MR. LINDSEY: It's been very useful at my 


1 institution. We have not experienced a large amount of down 

2 time. We've had a very small kill ratio, if you want to say, of 

3 birds or any small animals. And it does save millions of 

4 dollars each year in that you don't have to man the towers up 

5 there. Basically, it saves about 48 positions in my institution 

6 alone. So, to me, it is very good. 

7 As far as the housing, our typical 270 housing is 

8 an excellent housing unit, designed for Level Ills and it can be 

9 used as a Level IV. The 180 housing unit is also — can be used 

10 as a security housing unit, so it's an excellent unit for 

11 dealing with the higher custody general population Level IV 

12 inmates. 

13 CHAIRMAN LOCKYER: If we tripled the size of it 

14 at one location like that, would it work? 

15 MR. LINDSEY: You would have some problems that 

16 you would need to deal with, such as water availability, garbage 

17 disposal -- 

18 CHAIRMAN LOCKYER: Assuming there's water, I 

19 don't mean necessarily there, but that idea, you know, the mega 

20 prison idea has been talked about on occasion. 

21 MR. LINDSEY: If you tripled the size of it, and 

22 naturally you put in appropriate staffing for maintenance and 

23 operation of it, yeah, it would probably work. 

24 CHAIRMAN LOCKYER: Other questions? Did anyone 

25 wish to comment that we haven't heard from? Supportive comments 

26 I urge being brief. Negative ones we'll dig into a little 

27 more. 

28 MR. MABRY: Thank you. Senator Lockyer and 


1 Committee. Roy Mabry, California Association of Black 

2 Correctional Workers. I'm the State President for the 

3 organization. 

4 Want to show full support for all of the wardens 

5 that's up for confirmation. 

6 Wanted to point out something during Warden 

7 Alameida's comments earlier about a community program he has 

8 similar to that of Scared Straight. A bunch of kids that he 

9 brings into the institution and walk them through a system of 

10 what occurs in prison. They get a chance to share that. 

11 But anyway, Senator, for Warden Lindsey here, one 

12 hundred percent support, and he's a good man for the 

13 job. 

14 CHAIRMAN LOCKYER: Thank you. 

15 Yes, sir. 

16 MR. SEARCY: Good afternoon. Senator and 

17 Committee Members. 

18 First of all, with your permission, Senator, I'd 

19 like to for the record, even though it's after the fact, CCWA, 

20 Chicano Correctional Workers Association, is in support of Mr. 

21 Alameida. 

22 CHAIRMAN LOCKYER: We have you down for all. 

23 MR. SEARCY: Thank you, and it's for all and for 

24 Mr. Lindsey. 


2 6 MR. SEARCY: One comment that I'd like to make 

27 regarding Mr. Lindsey — two comments. One is that he is 

28 obviously very varied in his experience in the correctional 


1 field. 

2 The other one is that him managing and 

3 administrating a new institution, it's obvious that he is — his 

4 institution is being a fish bowl, so we can see where everything 

5 is being looked at. And everything being looked at so far has 

6 been satisfactory. So, that is obvious that he is an 

7 appropriate administrator. 

8 With that, again, Senator, I want to follow 

9 Senator Kopp's mode of 30 seconds. I think I have about 29 

10 seconds. 

11 Thank you. 

12 CHAIRMAN LOCKYER: Thank you. 

13 Yes, sir. 

14 MR. APONTE: Senator Lockyer, Members of the 

15 Committee, I'm Conrad Aponte, Jr., from City of Gonzales, and 

16 I'm the CAC Chairperson for that area for both prisons. CAC for 

17 the Salinas Valley State Prison and Soledad since 1985. 

18 I've been with the committee and been through the 

19 state, through many prisons, but in the area I also have worked 

20 myself with many wardens, a few of them, in the past. I have 

21 found out since Warden Lindsey was assigned to that prison in 

22 there as manager first, and as Warden, he's been doing an 

23 outstanding job, working day and night sometimes during the 

24 construction of the prison. • 

25 I believe he's very well qualified. He's very 

26 well liked in the community. And the Citizens Advisory 

27 Committee, we are very happy to have him in the area and work 

28 with him. I hope he can be confirmed by the this Committee 


1 today. 

2 CHAIRMAN LOCKYER: That's about to happen. Thank 

3 you, sir. 

4 Mr. Thompson. 

5 MR. THOMPSON: Thank you, Senator Lockyer, 

6 Members of the Committee. I'm pleased to follow the police 

7 chief from my old home town of Gonzales. Not many left from my 

8 class. 

9 The California Correctional Peace Officers 

10 Association represents the 24,000 peace officers in CDC and CYA. 

11 We have a lot of concerns that come up in any given facility. 

12 Salinas Valley State Prison is no different, especially since 

13 it is a new prison being brought on line. 

14 One of the unfortunate practices is, they often 

15 are saddled with the bottom of the barrel from other prisons 

16 that send their problem kids over to the new joint and let the 

17 new warden have to scramble and deal with it. 

18 SENATOR BRULTE: Is that inmates or CCPOA 

19 members? 

2 ' [Laughter.] 

21 MR. THOMPSON: No. Touche, all right. Senator 

22 Jim, I'll tell you that part of the problem, too, is it's about 

23 70-75 percent brand new staff. That also complicates matters, 

24 and then given that you have a Level IV institution, so maybe 34 

25 percent of the problem officers. 

2 6 But given with the brand knew institution. Level 

27 IV, a lot of new staff, tough inmate population, you're looking 

28 at a real tall order. So, the chapter, the officers that are 


1 there, have expressed a great concern about their safety. There 

2 is a high level of violence there. 

3 We are looking to improve that as much as we can. 

4 We have had a very positive meeting with Warden Gary Lindsey a 

5 couple of weeks ago. I should state for the record that, as you 

6 know, over the years this Association has really dealt with the 

7 nuts and bolts of prison operations and often feels very 

8 strongly about how to help in that area, because it does affect 

9 our officers on the line. 

10 For the first time that major questions and 

11 concerns about staff safety and operations have come up, we have 

12 decided to take it a little bit different tack and work on 

13 improving the communications to deal not only with the issues at 

14 hand, but also to ensure that future issues that crop up can be 

15 dealt with efficiently, effectively, with good communications at 

16 the local level. 

17 Our Chapter President, Gino Coranza, other 

18 members of that chapter, and indeed, the statewide leadership of 

19 . the Association, met with Warden Lindsey, members of his staff, 

20 and had a very good meeting, airing out key issues. Of course, 

21 one of those being the concern about the adequacy of staffing. 

22 There is discussion ongoing with the 

23 administration on those concerns, so we will defer to that 

24 process, but indicate for the Committee that that is a major 

25 issue for us because that's the back-up. If you have to, 

26 because of staffing, take officers off a main yard and put them 

27 on medical escort or what have you, and you have no yard 

28 coverage, obviously, there are officers who are vulnerable. 


1 Also, we are concerned with getting adequate 

2 training. There still does need to be training for a lot of 

3 these brand new officers on gang identification, drug issues, 

4 the enhanced out-patient procedures dealing with the so-called 

5 crazies that we have. There's a building that's devoted to just 

6 those kinds of psychiatric problem inmates. 

7 When you have so many, and have so many new 

8 officers, the need for training and getting that on line is 

9 extremely important. And those are some areas that still need 

10 to be addressed, so we're going to be pushing to the best of our 

11 ability to have those things dealt with. 

12 With that we are pleased to make these comments 

13 to you. We think that we're going to have a very positive 

14 working relationship with Mr. Lindsey. 

15 Appreciate you taking the time to hear our 

16 testimony. 

17 CHAIRMAN LOCKYER: Thank you. 

18 We were just all noticing, Mr. Thompson, your 

19 letter to the Warden that said there are some of these matters. 

20 But you'd prefer to just continue to work them out traditionally 

21 at the site, rather than trying to do it here, and that makes 

22 some sense. 

23 MR. THOMPSON: We think does make as much sense 

24 to work out what we can. So many of these issues are just a 

25 need to enhance communication. 

2 6 CHAIRMAN LOCKYER: They're details. 

27 MR. THOMPSON: Commit to an ongoing schedule. 

28 For example. Warden Lindsey has a meeting with our Chapter 


1 President tomorrow, and I think they're regularly scheduled here 

2 for the future to continue to deal with these things. 


4 Warden, it sometimes is suggested, too, that we 

5 need to refine and update our system of classifying inmates, at 

6 least try to develop better predictors of post release 

7 behavior. 

8 Have you heard that discussion in your own years? 

9 MR. LINDSEY: I'm aware ~ 

10 CHAIRMAN LOCKYER: Do you have any reaction to 

11 the idea? 

12 MR. LINDSEY: Well, I'm aware that the Department 

13 is preparing a study for legislation. I believe Mr. Maddock can 

14 relate to that if he wants to. 

15 CHAIRMAN LOCKYER: Any other? 

16 SENATOR AYALA: I just want to ask the Warden, 

17 the illegal use of drugs in the prisons has always concerned 

18 me. Yours is a fairly new prison, Salinas Valley. 

19 Are there any problems today in terms of illegal 

20 drugs and alcohol being used by inmates? 

21 MR. LINDSEY: Yes, there is. In any institution 

22 at any given time, you may be subject to having staff or 

23 visitors who bring in drugs. But you have to deal with it on an 

24 absolutely zero tolerance. You constantly investigate, you 

25 follow up all rumors and leads, and you observe the inmates to 

26 see how they're acting. 

27 SENATOR AYALA: There's no way you can stop that? 

28 MR. LINDSEY: Other than totally skin searching 






























everybody that comes through your front gate, sir, I would find 
it very difficult because we've had visitors bring them in 
children's diapers. We have staff that bring it in. 

SENATOR AYALA: I've heard stories that the staff 
sometimes brings it in to the inmates. Any evidence of that? 

MR. LINDSEY: I currently have an investigation 
going on just of that nature, yes, sir. 

SENATOR AYPdjA: Thank you. 

CHAIRMAN LOCKYER: I guess we're ready for 
Senator Brulte's motion. 


CHAIRMAN LOCKYER: We have motion to confirm. 
Call the roll, if you will. 

SECRETARY WEBB: Senator Ayala. 


SECRETARY WEBB: Ayala Aye. Senator Brulte. 


SECRETARY WEBB: Brulte Aye. Senator Hughes. 
Senator Lewis. 


SECRETARY WEBB: Lewis Aye. Senator Lockyer. 


SECRETARY WEBB: Lockyer Aye. Four to zero. 

CHAIRMAN LOCKYER: Congratulations, sir. Good 


MR. LINDSEY: Thank you. 

CHAIRMAN LOCKYER: All right, Mr. Mueller. 

You know, we ought to just turn one of these down 


1 once in a while or they won't come and see us any more. 

2 ' [Laughter.] 

3 CHAIRMAN LOCKYER: We only have two more left. 

4 Come on up sir. Good afternoon, sir. 

5 MR. MUELLER: Good afternoon, sir. I sure don't 

6 hope that that was starting a new process. 

7 CHAIRMAN LOCKYER: No, it's all right. 

8 MR. MUELLER: Thank you. 

9 I want to thank you for allowing me to come here 

10 and meeting this full committee. 

11 I want to give a real quick background about 

12 myself and where I'm from. I was originally raised in Minnesota 

13 on a farm. I went into the Marine Corps, and after I got out of 

14 the Marine Corps, I went back there. And I think the second 

15 year, the second winter when the snow melted, I decided to pack 

16 up and get back to California where I belonged. I've been out 

17 here ever since then. 

18 I've been with the Department 29 years. 

19 CHAIRMAN LOCKYER: Have you been in any of the 

20 farm prisons at all? 

21 MR. MUELLER: No, I haven't. No, sir. 

22 But I've been with the Department 2 9 years. 

23 During that 29-year period, I've worked at five different 

24 institutions. I've been on the line. I started out as a 

25 correctional officer. I was that for 10 years. Was a sergeant 
2 6 lieutenant. I even went over and became a food manager for a 

27 period of time on a training and development assignment to round 

28 out my career a little bit, so to speak, and I'd get a better 


1 idea of how the business side worked. 

2 And in working those different institutions, I've 

3 worked at all levels from a Level I to a Level IV. The 

4 experience that I've had since I've been appointed at Folsom and 

5 been able to work with the budget there, and ensuring that our 

6 budget is always in line, I think, has been one of the things 

7 that I've done at all institutions where I've been at. 

8 One of the things you said, to make it short, so 

9 with that, I'm going to end it. 

10 CHAIRMAN LOCKYER: That's okay. 

11 You're essentially a Level II facility now. 

12 Looking at where you've been, I'm trying to get you to comment 

13 on the differences in the different classifications. You were 

14 at — 

15 MR. MUELLER: I was at Folsom when it was 

16 originally a Level IV during the days — 

17 CHAIRMAN LOCKYER: So, you've seen — 

18 MR. MUELLER: Both sides of it, and I can assure 

19 you that I definitely appreciate working at a Level II 

20 institution as opposed to a Level IV. I can sympathize with 

21 those other wardens who have deal with those type of inmates. 

22 It's a lot easier and a lot better. We're able 

23 to do a lot more programs and do a lot of better things with 

24 them. 

25 CHAIRMAN LOCKYER: What kind of programming? 
2 6 MR. MUELLER: We've got a lot of education 

27 programs, work programs. We have prison industries. One of the 

28 best programs that we've instituted recently is our Computers 


1 for Schools/ which is a program where we take computers which 

2 are donated to the Department of Corrections through the 

3 Detweiler Foundation and totally revamp those, and then donate 

4 them back to the schools. 

5 It's a great program where inmates are able to 

6 get some real training, meaningful training that they can go 

7 right out to the street and go to work in. 

8 CHAIRMAN LOCKYER: Is that happening at other 

9 sites other than Folsom? 

10 MR. MUELLER: Yes, it is. I believe there's 11 

11 or 12 institutions. 

12 CHAIRMAN LOCKYER: That are doing this, the 

13 computer one? 

14 MR. MUELLER: Yes. We were one of the original 

15 ones that started. And there was four original institutions, 

16 and now there's, I think, 11 or 12. 

17 CHAIRMAN LOCKYER: How many inmates do you have 

18 associated with that. 

19 MR. MUELLER: The total programs, there's about 

20 30 inmates working within that program itself, and those that 

21 are going through the training, getting them ready to eventually 

22 get into that program. We do a complete vocational training 

23 program there that teaches repair of those. 

24 CHAIRMAN LOCKYER: I think there's a bill moving 

25 in the Assembly that says inmates got to work for 40 hours a 

26 week. 

27 How are you going to put them to work if that's 

28 the law? 


1 MR. MUELLER: Right now, in most cases, we're 

2 getting very close to that 40 hours a week. 

3 CHAIRMAN LOCKYER: Are you getting close to it? 

4 MR, MUELLER: The problem with it is, generally 

5 the staffing, the staff that work that, it's an 8-hour day for 

6 them, so the processing in and out time makes it very difficult 
1 to come to the exact. But we're running about seven-and-a-half 

8 in a lot of those. The full 8 hours would be very difficult. 

9 CHAIRMAN LOCKYER: And I have a little concern 

10 about security in some of the institutions if you try to move 

11 people around for 40 hours work, but that wouldn't necessarily 

12 be a problem for you. 

13 MR. MUELLER: In the Level lis it's a lot easier. 

14 We'd have to do some overlap as far as staffing and that, but 

15 it's more convenient than in a Level III or IV. 

16 CHAIRMAN LOCKYER: Other questions? Senator 

17 Ayala. 

18 SENATOR AYALA: The over-time at Folsom is also 

19 kind of up and down. May of this year, you had for the month of 

20 may, 69,504 in over-time. We're talking about dollars. The 

21 next month, 129,950. In August, you had 86,242 and it jumped in 

22 September, the following month, to 132,178. 

23 What accounts for those differences.. 

24 MR. MUELLER: Usually the differences are based 

25 on training programs that we have to get in. We just got into 
2 6 — I believe the one in September there is when we were doing a 

27 bunch of training for the psychiatric patients that we had in 

28 there. This training is mandated, so we had to put it on. When 


1 we have to do things in a very short period of time, it gets 

2 very costly. Those numbers will jump real quick on us. 

3 Normally, we are able to spread that training 

4 out over a year. In these particular cases, we weren't able to 

5 because we had a deadline. We can use permanent intermittent 

6 officers and other things to reduce that over-time tremendously, 

7 and in most cases, we do. 

8 SENATOR AYALA: Are you attempting to go keep the 

9 over-time down? 

10 MR. MUELLER: My goal is to bring over-time down 

11 to zero. 

12 SENATOR AYALA: CCPOA won't like you. 

13 MR. MUELLER: Well — 

14 SENATOR AYALA: That doesn't matter; does it? 

15 MR. MUELLER: I respond to the State of 

16 California and the budget. That's my first concern. 

17 SENATOR AYALA: There you go. 

18 What percentage of the permanent intermittent 

19 employees do you use for correctional officer category? 

20 MR. MUELLER: I would say we probably have about 

21 90 percent of the permanent intermittent s that we have are in 

22 the CO capacity. 

23 SENATOR AYALA: Do you feel that the Legislature 

24 should tell your wardens when to use and not to use PIEs in your 

25 operation. 

2 6 MR. MUELLER: I believe that any good manager is 

27 able to work that out so that we can use them fairly and in an 

28 equitable manner, and so that that we're working them enough 


1 hours that they can live on. I think that if we bring too many 

2 in, occasionally/ that it hurts us in that aspect, but it's one 

3 way of us being able to meet our budgets. 

4 SENATOR AYALA: The next question's already been 

5 answered when you say you'd like to keep the over-time to 

6 nothing. 

7 MR. MUELLER: Yes, sir. 

8 SENATOR AYALA; That answers the next question. 

9 That's all the questions I have, Mr. Chairman. 

10 SENATOR LEWIS: There were some press reports 

11 relative to fumes that were causing health problems for guards? 

12 MR. MUELLER: Yes, sir. 

13 SENATOR LEWIS: Is there any update on that 

14 situation? 

15 MR. MUELLER: We're doing testing with different 

16 companies almost on weekly basis. We have not been able to find 

17 what the source is. We were trying number of different things. 

18 It's something that's a major concern of mine. 

19 This goes back to about 1985, when we started doing test sites 

20 up there. It's a very old prison. The prison first opened up 

21 in 1880, and who knows what's been dumped or whatever that's 

22 been out there. 

23 We've done many test sites. We have some test 

24 wells that are there that they monitor on a regular basis. I 

25 have had a number of different companies come out. In fact, 

26 we're having more. And anything that it takes, any suggestions 

27 that's out there that can lead us to this ultimate result, we're 

28 going to go for. 


1 CHAIRMAN LOCKYER: Anyone present? The 

2 supporters, you're still supporting, right? We'll just note 

3 that for the record. That will be okay. 

4 Any opposition present? Mr. Thompson is another 

5 supporter. 

6 MR. THOMPSON: Thank you, Mr. Chairman, Members.- 

7 Again, Jeff Thompson with the CCPOA. 

8 We have also had a great concern, as Senator 

9 Lewis has touched on, with the toxics problem out on site. 

10 Oftentimes, there is a lot of problems with officers falling 

11 out, dizziness, nausea. And then when the fumes it, it's even 

12 worse. A little joke there, but the idea being, though, that it 

13 is a difficult job, and the toxics do complicate things for 

14 officers, especially if they're in a gun position where they 

15 have to be alert and capable. 

16 There's some use of SCUBA, or the self-contained 

17 breathing apparatus, that is used to off-set the effect of those 

18 fumes. There is the ongoing need for the training of officers 

19 in the armed posts with that equipment on to be able to 

20 function. So, that is a matter that's been taken up with Warden 

21 Mueller. 

22 The Chapter, and the Warden, and the CCPOA 

23 leadership did meet. I'm happy to say that it was a very good 

24 meeting. We've reaffirmed the commitment to close 

25 communication, especially on the issue of the toxics. 

26 There's been also concerns over perceptions of 

27 disparate treatment. Those kinds of things we're going to be 

28 talking about, getting those perceptions dealt with. 


Glenn certainly knows our crowd. We're very 
comfortable in working with him to deal with the tough issues. 

AlsO/ as the Chair knows, there's been a lot of 
good dialogue between the Association and your office on the 
issue of prison construction. We noted your question on the 
mega prison to Warden Lindsey. Appreciate that being up there 
on the list of concerns. 

We are concerned that, since there has been no 
new space worked out in terms of negotiations with the 
administration and legislative leadership, that we worry of the 
need to upgrade the current Level II facility that Folsom is. 
If there's a chance that it may go to possible Level III type of 
a prison, then that obviously would be of great concern to the 
chapter, and the staffing issues. We know that the Warden would 
be more than amenable to talking with the chapter and dealing 
with those concerns. 

With that, we're pleased to work with Warden 
Mueller, and we appreciate the Committee taking our input. 

CHAIRMAN LOCKYER: Thank you, Mr. Thompson. 

You'll note that it's interesting to see the need 
statistics change with time. The current projection suggests 
not a lot of III and IV projected increases, but more I and II 
in the next several years. So, I hope we can figure out ways to 
accommodate that work. 

SENATOR AYALA: One more question about that 
mysterious illness that has affected officers and inmates in the 
vicinity of Tower 21. 

MR. MUELLER: Yes, sir. 


1 SENATOR AYALA: It's been documented there is a 

2 problem, but nobody seems to know where it's coming from? 

3 MR. MUELLER: Nobody's been able to actually 

4 identify it positively where it's coming from or what it 

5 really is. We've gotten monitors that we've put up there that 

6 monitor the different levels. We've changed some of those 

7 monitors around. We've put in now a negative — excuse me, a 

8 positive air flow system which we're trying to see if this will 

9 help within that tower. 

10 We've put monitors on the smoke stacks. We've 

11 had people come out and monitor our sewers. I tell you, this is 

12 one of those things that's the most difficult thing I've ever 

13 done. 

14 SENATOR AYALA: Just occurs on Tower 21 and no 

15 where else? 

16 MR. MUELLER: There's a couple other towers, if 

17 the wind is right, can be affected also. 

18 You know, in the prison system, we're used to 

19 dealing with things that we can get our hands on. This really 

20 is something that has been very difficult for me, because I 

21 can't get my hands on it. Nobody has been able to. It's 

22 frustrating. 

23 CHAIRMAN LOCKYER: We have odor problems, too, 

24 but mostly at campaign time. 

25 [Laughter.] 

26 MR. MUELLER: I understand, sir. 

27 CHAIRMAN LOCKYER: What's pleasure of the 

28 Committee? 



2 CHAIRMAN LOCKYER: We have a motion by Senator 

3 Ayala to confirm. Call the roll. 

4 SECRETARY WEBB: Senator Ayala. 


6 SECRETARY WEBB: Ayala Aye. Senator Brulte. 


8 SECRETARY WEBB: Brulte Aye. Senator Hughes. 

9 Senator Lewis. 


11 SECRETARY WEBB: Lewis Aye. Senator Lockyer. 


13 SECRETARY WEBB: Lockyer Aye. Four to zero. 

14 CHAIRMAN LOCKYER: Good luck, sir. 

15 MR. MUELLER: Thank you very much, sir, and I 

16 thank the Committee very much. 

17 CHAIRMAN LOCKYER: You can tell who didn't have 

18 to drive far. 

19 Dr. Newland is our final warden. Good afternoon, 

20 sir. Go ahead, if you would, just tell us a little about 

21 yourself. 

22 DR. NEWLAND: Mr. Chairman, Members, I appreciate 

23 your time. 

24 As you can see from your notes, I began with the 

25 state about 25 years ago in parole in the San Francisco Bay 
2 6 Area. And there really, the emphasis was on communication 

27 because that was our only line of safety, our only line of 

28 defense with parolees out and in the community. And there I 


learned a lot about narcotics and substance abuse with a 
caseload of parolees." 

At Soledad/ I became involved in the basics of 
security and the classification system. Then up at San Quentin, 
that was a time of great unrest, so I got to learn the hard way 
the management of emergencies. And also, as the public 
information officer, I had more than my share of experience with 
the press, radio and television. 

At headquarters, I was involved in compliance 
with lawsuits statewide. There I learned the benefit of 
following our own rules and spent a lot of time in court, 
working with issues of accountability. And integrity and 
credibility were the most important issues there, so. that when I 
presented something to a judge, he was or she was assured that 
it was going to happen. 

At CMF South, my experience was in management, 
and most importantly, personnel selection, because an 
institution isn't the warden, it's the whole team of staff that 
are working together. Over at CMF, I became very much involved 
in the issues of mental health care and medical care. 

And after that experience, I went back to the new 
CSP Solano, where again, I've been working on education, 
program, industries, and joint venture because we are a 
programming institution. Simultaniously, I've of course all 
these years been part-time pursuing my own education, and I 
think each of these experiences has been a milestone in 
preparing for today. 

Thank you. 



2 Let me ask if there's anyone that wishes to 

3 comment. Yes, we're record you again as supportive. 

4 Yes, sir. 

5 MR. EDWARDS: Senator Lockyer, my name is Dave 

6 Edwards. My father, Ron, and my mother, Rita, and I operate the 

7 joint venture business in Mr. Newland's prison. We've been 

8 manufacturing furniture since 1990, and we've been in Mr. 

9 Newland's prison since February of 1994. 

10 Today you are considering the confirmation of 

11 Mr. Newland as the Warden. And I would like you to consider, 

12 too, that since Prop. 139, today's wardens, along with all the 

13 other responsibilities that they have, also have the 

14 responsibility of having a joint venture in their prison, or 

15 they will at some point. 

16 I would like for Mr. Newland, and for all the 

17 other wardens, and for you on the panel to bear in mind that 

18 private companies are not a vocational class or a PIA. They're 

19 a for-profit type business. The wardens must understand that, 
2 and the wardens must understand or make considerations when 

21 they're making decisions and consider that there is a private 

22 business whose livelihood rests with the warden's decision. 

2 3 I want to let you know that in the past, we have 

24 had some troubles at the prison. A couple weeks ago. Ken Hurdle 

25 acted as a mediator and brought Mr. Newland and our company 

2 6 together. And we discussed changes that could be made, and we 

27 discussed Mr. Newland's support. 

28 And Mr. Newland at that time reaffirmed his 


support/ and has indicated that he would make every effort to 
make our private business viable and successful. 

This hasn't happened yet. We only had this 
meeting a couple weeks ago. I'm hopeful that Mr. Newland will 
be supportive, as he has indicated in a memo that he sent to us. 

But I would like to ask you on the panel and 
others to keep in mind the actual necessity of wardens to reach 
out and consider private businesses when they're making their 
decisions . 

I'm hopeful that Mr. Newland will do that in the 
future. Mr. Hurdle has indicated that if we do have problems in 
the future, that I can get back with him, and I would suppose 
that he would inform whoever it would take to have a look or to 
have another meeting with this. 

At this time, I can't — 

CHAIRMAN LOCKYER: You have about 22 prisoners, 
roughly, in the program? 

MR. EDWARDS: Roughly, right. 

CHAIRMAN LOCKYER: In the joint venture 

MR. EDWARDS: Right. 

At this time, I can't give support to 
Mr. Newland, but I will reserve it for down the road. 

CHAIRMAN LOCKYER: Okay, sir. Thank you. 

MR. EDWARDS: If anybody has any questions, I'd 
be happy to answer them. 

CHAIRMAN LOCKYER: If you had to say one problem 
that seems to reoccur, what would you think it is? 


1 MR. EDWARDS: The main problem, the bottom line 

2 is getting the inmates to the job site. 

3 CHAIRMAN LOCKYER: Getting them there? 

4 MR. EDWARDS: Right, having them work 35, 40 

5 hours a week. Everything else kind of takes a back seat to 

6 that. 

7 CHAIRMAN LOCKYER: I could understand why that 

8 might be a problem. Those aren't the most motivated people on 

9 the planet. 

10 DR. NEWLAND: And occasionally, there are 

11 disruptions in the institutional operation, as there would be in 

12 any institution. TVnd as we are joint venture, the Edwards and I 

13 are working together in the spirit of compromise to try to work 

14 out these issues. 


16 Thank you, Mr. Edwards. 

17 MR. EDWARDS: Thank you. 

18 CHAIRMAN LOCKYER: I note in looking at your 

19 summation, I guess we could call it. Warden, of inmate work 

20 issues, the largest group is the 1600 in support services. 

21 Explain what's included in those type jobs. 

22 DR. NEWLAND: Support services would include the 

23 kitchens, cleaning in the institutions, yards, maintenance, all 

24 of the things day-to-day. 


2 6 DR. NEWLAND: Library and even in my office we 

27 have inmates doing work. 

28 CHAIRMAN LOCKYER: And prison industries, 444. 


What other kinds of industries are there? 

DR. NEWLAND: In prison industries, we have a 
list for you. Those include optical. We make eye wear for 
state institutions, and also for the Medi-Cal program 
statewide. We have a precast factory which has been making 
prisons, but that business has slowed down a bit, as you might 
understand. We also make metal furniture, and we have a book 
bindery which makes binderies such as — binders such as one you 
have. I believe those were made in the prison industries. And 
also we make the cloth road signs for Caltrans. 

CHAIRMAN LOCKYER: The laundry, is that an 
external industry or is it just for internal use? 

DR. NEWLAND: Our laundry serves the California 
Medical Facility and Sonoma State Hospital and ourselves, and on 
occasion, if another institutional laundry is inoperable, we 
would take on other institutions such as occasionally the 
Veterans Home or one of the other state hospitals. 

CHAIRMAN LOCKYER: What do you regard as hardest 
part of your job? 

DR. NEWLAND: Well, right now, my major focus is 
with the staff on communicating with inmates. That goes back to 
my time in parole, because especially in a Level II side of the 
institution, our major mode of security is communication, 
knowing what's going on with the inmate population. 

Every employee in the institution is going 
through a training program right now, including myself — I went 
through it — in crisis communication; how to try to deal with 
an inmate before a problem evolves into something where we have 


1 to actually use force. 

2 I regard the first step, a use of force, is 

3 actually with the inmate population. And since we have so many 

4 new employees, and so much turnover, and so much growth in the 

5 Department, those of us who grew up in San Quentin, or Soledad, 

6 or in parole, who were used to that kind of interchange with the 

7 prisoners are few and far between. So, we're trying to 

8 communicate that to the staff. 

9 CHAIRMAN LOCKYER: Questions from Members. 

10 SENATOR LEWIS: Move confirmation. 

11 CHAIRMAN LOCKYER: We have a motion to confirm. 

12 Quickly, since you've had these responsibilities 

13 as parole agent, new prison coordinator, court management, you 

14 did kind of comment on what you learned that you'd teach us for 

15 a moment, like in the court system, to be careful about 

16 following the law. 

17 How about as a parole agent? Anything that you 

18 would regard as lessons for policy makers in dealing with the 

19 parolees, the system, and how it works? How to have less 

20 recidivism. Any thoughts you might want to share? 

21 DR. NEWLAND: I believe you brought up what would 

22 be the priority. Remember, this is 20-some years when I was a 

23 parole agent, but one of the problems remains the same. 

2 4 That is, having some kind of bridge between the 

25 institution and parole, as exists with Amity and some of the 

2 6 other drug programs, so that there is a follow-up in the 

27 community. In some areas that's called after care, so that 

28 there's some continuity of the program out into the community. 


so we can do whatever we can to prevent the return of these 
folks to the institution. 

CHAIRMAN LOCKYER: New prison coordinator, does 
that mean you were actively involved in bringing new prisons on 

DR. NEWLAND: I was temporarily assigned to the 
prison at San Diego when that was under construction. 

CHAIRMT^ LOCKYER: So, it's a specific new one 
that you're bringing in? 


CHAIRMAN LOCKYER: Any lessons from that we ought 
to know about? 

DR. NEWLAND: Well, I was assigned to that task, 
and several court orders came down, and I was redirected back to 
the court job. So, I didn't spend that much time in that area. 

CHAIRMAN LOCKYER: And we heard about the court 


CHAIRMAN LOCKYER: All right, we have a motion. 

SENATOR AYALA: The total gross profits for all 
the CSPs, Solano Prison Industries in fiscal year '95-96, was 
1.2 million. You project that in '96-97, it will be around 2.6 

First of all, why the increase? And number two, 
where does that go. General Fund? 

DR. NEWLAND: The prison industries increase, as 
you can see from the chart, is primarily in book bindery with 
some contracts that we have with the Department of 


1 Transportation and with the Department of Corrections in 

2 producing the new medical file system. And also, we make Motor 

3 Vehicle handicap placards. That's really where that increase 

4 comes from. 

5 I'm not familiar with the handling of the funds 

6 in the PIA process. That's an independent entity from the 

7 institution. 

8 SENATOR AYALA: Does it go back to the General 

9 Found, or does it go to match your budget. 

10 DR. NEWLAND: It does not go against the 

11 institution budget, I'm here to guarantee that, sir. 

12 SENATOR AYALA: It must go back to the Governor; 

13 right? 


15 MR. MADDOCK: Good afternoon. Senator. Tom 

16 Maddox, currently Interim Director of the Department of 

17 Corrections. 

18 The PIA budget would be where those funds go. 

19 They manage all the prison industries throughout the prisons, 

20 and they have to balance their budget statewide. Some 

21 prisons -- 

22 SENATOR AYALA: Statewide budget. 

23 MR. MADDOCK: Right, that was just one prison, 

24 one institution's budget, and it has to balance out statewide. 
2 5 SENATOR AYALA: Thank you. 

2 6 CHAIRMAN LOCKYER: Are we ready here? We have a 

27 motion before us. Call the roll, if you will. 
2 8 SECRETARY WEBB: Senator Ayala. 



Ayala Aye. Senator Brulte. 


Brulte Aye. Senator Hughes 




5 Senator Lewis. 


7 SECRETARY WEBB: Lewis Aye. Senator Lockyer 


9 SECRETARY WEBB: Lockyer Aye. Four to zero. 

10 CHAIRMAN LOCKYER: Thank you. 

11 DR. NEWLAND: Thank you. 

12 [Thereupon. This portion of the 

13 Senate Rules Committee hearing was 

14 terminated at approximately 3:22 P.M.] 

15 — ooOoo — 





























I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
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thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 

, 1997. 

J day of 

Shorthand Reporter 


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1 3 1997 






ROOM 113 


MONDAY, APRIL1 4, 1997 
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Reported by 




ROOM 113 


MONDAY, APRIL 14, 1997 
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Evelyn J. Mizak 
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GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NANCY MICHEL, Consultant on Governor's Appointments 



Occupational Safety and Health Appeals Board 


Bureau of Security and Investigative Services 



Proceedings 1 

Governor's Appointees: 


Occupational Safety and Health Appeals Board 1 

Background and Experience 1 

Questions by SENATOR AYALA re: 

Purpose of Citations and Penalties 5 

Decreasing Level of Fines 5 

Effectiveness of Current Maximum Penalties 

in Reducing Injuries and Illnesses 6 

Questions by SENATOR LEWIS re: 

Current Backlog of Cases 7 

Any Year with Imbalance of Incoming 

Cases Versus Those Disposed Of 8 

Goal of Disposing of Cases within 

Six Months of Entering the Process 9 

Longest Average Amount of Time to 

Conclude Case 10 

Questions by CHAIRMAN LOCKYER re: 

Length of Time for Cases to Go through 

Process before Recent Reforms 10 

Purpose of Pre-hearing Conference 11 

Enforcement of Citation in Workplace with 
Numerous Employers Present 11 

Most Difficult Case 13 

Any Problems with Current Laws 13 

Motion to Confirm 13 

Committee Action 14 



Bureau of Security and Investigative Services 14 

Background and Experience 14 

Questions by SENATOR AYALA re: 

Number of Licenses Denied Last 

Fiscal Year 17 

Reason for Most Denials 17 

Number of Disciplinary Actions 

Taken in Last Fiscal Year 17 

Questions by CHAIRMAN LOCKYER re: 

Consumer Complaints 18 

Motion to Confirm 19 

Committee Action 20 

Termination of Proceedings 2 

Certificate of Reporter 21 

• — ooOoo — 

CHAIRMAN LOCKYER: And we'll go to Mr. Gazdecki, 
I guess, would be the first person to talk to us. 

Hi, good afternoon, sir. 

MR. GAZDECKI: Good afternoon. 

CHAIRMAN LOCKYER: Did you want to start with any 
kind of comment at all? 

MR. GAZDECKI: I have a brief statement. 

CHAIRMAN LOCKYER: Please do. That helps. 

MR. GAZDECKI: Mr. Chairman and Members, thank 
you for this opportunity to come before you today so that I can 
respond to any questions you may have about my service as 
management member of the Occupational Safety and Health Appeals 

The mission of the Appeals Board is to fairly and 
efficiently decide appeals from citations for alleged violations 
of the OSHA work place safety and health laws. In addition, the 
Board strives to provide clear and consistent guidance to the 
public about those requirements, thereby promoting work place 
safety and health. 

In approaching this important responsibility, I 
keep two things close in mind. One harkens back to ancient 
Greece. Many centuries ago in the marketplace of Athens, the 
philosopher Thucydides was asked by a fellow citizen, "When will 
justice come to Athens?" And Thucydides replied, "Justice will 
not come to Athens until those who are not injured are as 
indignant as those who are." 

1 CHAIRMAN LOCKYER: He also said, "Justice is the 

2 interest of the stronger, " in the Melian Dialogue, but we 

3 probably don't want to get off on this. 

4 [Laughter. ] 

5 MR. GAZDECKI: But in any event — 

6 CHAIRMAN LOCKYER: That means three votes. 
f [Laughter. ] 


9 MR. GAZDECKI: The second point I try to keep in 

10 mind in going about my job is that it is very important for our 

11 board not only to be faithful to the law, and fair and impartial 

12 to the parties, but go about what we do so that we inspire the 

13 confidence of labor, business, and the public at large. Because 

14 without such confidence, it would not be long before the parties 

15 were routinely, rather than rarely, seeking redress in the 

16 courts. 

17 Such a development, in my opinion, would not be 

18 beneficial because our courts are over burdened already, and the 

19 time and expense to adjudicate these matters would likely go up. 

20 Prior to being appointed to this position, I 

21 worked in the private sector. I began my career as a lawyer in 

22 the Office of the General Counsel at Ford Motor Company and was 

23 part of the Environmental and Safety Group. 

24 Upon returning to California, I entered private 

25 practice, in the course of which I've handled tort, insurance, 

26 real estate, environmental, construction, contract, employment, 

27 and professional liability matters. I've also taught law school 

28 for a number of years as a member of the faculties of the 

Ventura and Santa Barbara Colleges of Law. 

Over the past nine months since my appointment as 
its Chair, our Board has initiated a number of reforms. In 
January of this year, we wrote to every Member of the 
Legislature, as well as to key labor leaders and members of 
industry, to ask for suggestions about improving our operations. 
We also sent surveys to our customers and posted them on the 
Internet . 

We've moved towards a system of vertical case 
management so that one judge handles a case from when it is 
docketed through the pre-hearing conference to increase our 
efficiency. We have taken the scheduling of our hearings off of 
what was basically automatic pilot, and instead, each month 
develop a unique strategy to maximize case load reduction. 

We have provided each of our administrative law 
judges with laptop computers so they're more efficient in 
writing their decisions when they're away from the office, 
hearing matters around the state. 

Recently, we have put our decisions and those of 
our judges on the Internet so the public can learn more about 
work place safety and health. 

We have reduced the time it takes to review 
settlements coming before us from what was three to four months, 
to now, one month or less. 

And lastly, we are now allowing oral argument on 
selected petitions before our three-member board. Next week we 
will receive oral arguments in two matters, which I'm informed 
this is first time in the history of the board that there will 

be such oral argument. Now, we're doing that so that this board 
has a more complete understanding of the issues in those 
petitions which pose potentially significant public policy 
implications before we decide. 

Well, that's a brief overview of the major 
reforms our board has undertaken since I was appointed as its 
Chairman. I believe these will prove to be beneficial, and will 
simply just add to what was already a well run operation. 

I hope I'll be allowed to continue working in 
this capacity. I'm committed to the mission and dedicated to 
being a pro-active, progressive leader in the cause of work 
place safety and health. 

In conclusion, I'd like to thank Nancy Michel and 
her staff for their help, and I'd like to thank all of you for 
meeting with me. I would appreciate your support by 
recommending my confirmation to the full Senate. 

Thank you. 

CHAIRMAN LOCKYER: Is there anyone present who 
wishes to comment at all either for our against? 

We have a number of nice letters, and so on, in 
support of your appointment, and no opposition that we've heard 

You even have friends that are aggressive enough 
to talk with a judge that I periodically bump into, and that 
sort of thing, that says, "Now I'm supposed to tell you about 
him, good guy; good guy." 

MR. GAZDECKI: I'm delighted to hear it. 

CHAIRMAN LOCKYER: Yes, there's a little network 


Senator Ayala. 

SENATOR AYALA: We had a nice visit this morning 
and you covered a lot of territory, but I do have a couple 
questions . 

What do you see as the purpose of citations and 
penalties in the Cal OSHA program? What are the purposes of 

MR. GAZDECKI: I think the over arching purpose 
must be to ensure that there's work place safety and health, 
that there is compliance with the law as set forth in the Labor 
Code and in Title Eight of the regulations. That's the purpose. 

SENATOR AYALA: We have complaints that the level 
of fines have been decreasing. Why is that so? 

MR. GAZDECKI: I don't know whether empirically 
it's true or not, that the level of fines is decreasing. If I 
could try and give just a very brief overview of how the penalty 
system works, it may be helpful to understand why what starts 
out looking like a very large penalty often doesn't end up that 

Under the system we have here in California, the 
Division of Occupational Safety and Health is charged with going 
to the work place, citing what are perceived to be violations, 
and then, under regulations promulgated by the Director of the 
Department with a very specific formula, propose a penalty. 

If the employer does nothing within 15 working 
days, that will become the assessed penalty. But if the 
employer challenges that, it comes to our board. And on the way 

to a hearing, a number of those matters will be settled. 
They'll be settled because, in some cases, the evidence will not 
support what was alleged. In some cases, the penalty will 
decline because while the violation occurred, and everyone 
agrees that it did, the classification was incorrect. 

And if you look at the thresholds, if you go, for 
example, from a willful violation, which is a very, very heinous 
sort of thing where the penalties could be 70,000, and you drop 
down to a lower classification, the maximum is 7,000. So, you 
see, just by the changing of the classification, you can have a 
very large drop. 

Another reason why the penalties decline from 
what their proposed level is to their assessed level is, often 
there will be multiple citations for really the same hazard. 
And there 're in excess of 3,000 regulations. So, you could have 
one problem in the work place that you could cite multiple 
different regulations for. 

And yet, the regulations provide in Section 
336 (k), it says that where you have multiple citations but it's 
really the same hazard, where it isn't necessary to bring into 
compliance, and the employer fully obeys as directed, then it's 
permissible to reduce some of those penalties. 

So, there are a number of factors that are 
responsible for why it starts out sometimes looking like a big 
number and ends up being a smaller number. 

SENATOR AYALA: Do you think that the current 
maximum penalties are effective in reducing the occupational 
injuries and illnesses? 

MR. GAZDECKI : I have no reason to believe that 
they're not. Certainly, the experience of this board prior to 
my appointment, but of recent vintage, going back a few years, 
when the Legislature mandated increases in the maximums, and 
then regulations were promulgated to carry that out -- I believe 
they went into effect June of 1992 -- well, from June until 
August, in that period we started to see a doubling of the 
appeals . 

So, on the one hand, by raising the level of the 
maximum appeal, you get people's attention. You also get them 
coming to the Appeals Board. 

So, I think they're effective, but it also is 
going to be something that would be litigated because the stakes 
have gone up. 

SENATOR AYALA: Thank you, Mr. Chairman. 


Senator Lewis. 

SENATOR LEWIS: What is the current backlog, 
number of backlogged cases? 

MR. GAZDECKI: Well, right now we have — I guess 
one way to answer your question. Senator, is, our goal is to try 
and be able to adjudicate or resolve a case within six months 
from its docketing. We're falling short of that in Northern 
California by a month or two, but we're exceeding it almost a 
year in Southern California. 

The exact backlog number I couldn't tell you, but 
I can tell you that in 1996, for example, we had 4,067 citations 
docketed. We were able to dispose of 4,022. So, we were almost 


doing one-to-one. 

We've made some of these reforms which I 
mentioned earlier to actually make our judges more productive, 
help them to do their job. And we've hired a new administrative 
law judge. And we are projecting that we will see, in '97, 
about the same number of citations come in, but we believe we'll 
be able to increase the number disposed of by about 500 to a 
thousand. So, we're going to be able to cut that backlog. 

And our goal, by restratigizing every month, 
instead of just using one rule to tell us how to assign cases, 
we believe, is going to help us to pare that down so we're back 
to six months, that target, within a year or so. 

SENATOR LEWIS: You mentioned 1992, I think it 
was, as a pivotal year when the level of fines was increased, 
and the number of appeals went up. 

In the last few years, has there been any 
particular year where there was a large imbalance of the number 
of incoming cases versus those that were disposed of? 

MR. GAZDECKI: I'd have to refer to some 
information I have with me. If you'll bear with me, I'll try to 
answer your question. 

I have statistics for each of the years with me. 
They're not all summed in terms of total dispositions. My 
recollection is that a couple of years ago, when the enforcement 
activity increased, when there were more inspectors, our work 
load went up. Similarly, when the hiring stopped and there were 
cutbacks, the number of appeals coming in declined. 

For example, in 1996, as I said, we had about 

4,067 appeals docketed. That was about 700 fewer than the 
preceding year. And we can only surmise that that may be due to 
the fact that the division had fewer inspectors or hadn't hired 
to the level they had previously. 

I'm told that they've been in the hiring mode, 
and we've anticipated that in our decision to go forward with 
hiring an additional administrative law judge. We've placed 
that judge in southern California, where the biggest backlog 

Is that responsive? 

SENATOR LEWIS: I think so. 

You said your goal is to try to dispose of these 
cases all the way through the process within six months? 

MR. GAZDECKI: That is our goal. We haven't 
achieved it, but we think that would be a very laudable standard 
to meet. We think it is doable. 

One way we're attempting to get a lot closer to 
that goal than we have been is to be more aggressive in the 
scheduling of pre-hearings, where we have found that up to about 
50 percent of our cases can be successfully disposed of to the 
satisfaction of the government and the satisfaction of the 
employers . 

And so, what I have suggested, with the 
concurrence of other board members, is that we place a heavier 
emphasis on that. And we have some performance standards that 
we've developed in terms of how many pre-hearings we're striving 
to get through. I believe that number is a minimum now of 350 a 
month. And I say it's a minimum, but it's an aggressive task 


for us with our staffing. 

We've had some analyses done internally that 
suggests that if we were to do that, within a matter of maybe 
five to seven months, all things constant, we should be able to 
get that backlog down where we'd be pretty close to our target. 

SENATOR LEWIS: Just as a last question, perhaps 
in the last decade or so, do you know what the longest average 
amount of time was under the worse circumstances? 

MR. GAZDECKI : I don't. I can get that for you. 
I don't have it at the top of my head. 

CHAIRMAN LOCKYER: I believe you said six months 
from the term of art, posting or filing? 

MR. GAZDECKI: We say docketing. 

CHAIRMAN LOCKYER: Docketing. Now, what's 
happened before that in terms of the original? How long would 
it take? 

MR. GAZDECKI: What would happen is, the statute 
of limitations for the government to cite an employer is six 
months from the incident. Assuming they've timely done that, 
then the employer, upon receipt of the citation, must, within 15 
working days, file an appeal or, if they're running short, they 
can pick up the phone or FAX us. That will stop the running of 
the time. 

It comes into our office, and from that — once 
we are notified of an intent to appeal, and the papers come in, 
it can take up to two weeks to get the file created and assign 
it a number. Then what happens is, the parties may, on their 
own, pursue some settlement discussions. If not, we assign a 


pre-hearing date. That's conducted telephonically . And, as I 
said, somewhere around 50 percent of them do get resolved 
through that process. 

CHAIRMAN LOCKYER: And the purpose of that 
hearing is just simply to schedule, to put it on the calendar, 
the pre-hearing? 

MR. GAZDECKI: Not really. 

CHAIRMAN LOCKYER: That's like a settlement 

MR. GAZDECKI: It's like a settlement conference, 
or a readiness in settlement for the purpose of not only 
exploring settlement, but also to identify, if it's going to go 
on to hearing, can there be a narrowing of the issues, 
stipulation as to evidence, checking time estimates, and so 

And also, the same judge who hears the settlement 
conference is different than the judge who will hear the case, 
so we try to encourage candor. 

CHAIRMAN LOCKYER: What happens if you have a 
work site with numerous employers, maybe it's construction with 
a general and a lot of subs or something. How do the citations 
that in that example? Can they cite against an employer that 
has a sub that's doing something inappropriate, or do you see 
cases like that? 

MR. GAZDECKI: Oh, yes. I think there are a 
couple of things going on in a work place, and it's really much 
more common than we might think, where there are multiple 
employers . 


Every employer is subject potentially to citation 
if that employer has its employees exposed to conditions that 
violate the safety orders. 

Now, in a situation where you have multiple 
players, let's say one employer was responsible for being the 
general contractor at a place, and another one was responsible 
for trenching. And yet a third one maybe had someone installing 
equipment or a structure. 

Let's pose that the risk was created in the 
trench. That operation may have been concluded, and that 
employer may be physically gone, as may be the general at the 
time the OSHA inspector comes and sees a problem. 

If the risk is posed to the employees of the 
employer who is building something at that time, or working with 
equipment, that is the employer in California who is subject to 
citation, not the other ones. 

The federal OSHA has a different rule. And under 
the federal rule, all three of them could have been cited. 

This goes — the difference goes back to a case 
in California that came before our board. It was long before my 
time, but the board at the time decided that the rationale for 
just citing one employer was that, under California's scheme, if 
you didn't have employees there, you had no duty. It's only the 
employer who has employees exposed to the risk who can be cited. 

Now, that's something that I think has been 
debated, and my understanding is that the division has drafted a 
regulation for consideration by the Director that would modify 
that, but I have not seen the regulation and can't comment on 



CHAIRMAN LOCKYER: Is there any case or policy 
that comes to mind as the most difficult for you to resolve 
during this tenure? 

MR. GAZDECKI: No, I don't think one in 
particular comes to mind. They all get, I guess, as much 
attention as I think it needs for me to make a decision with the 
other board members that we can stand by. 

CHAIRMAN LOCKYER: Are there times when you think 
that the law or practice needs to be changed, that there's some 
unfairness that's a product of applying whatever the current 
laws might be? 

MR. GAZDECKI: Nothing particular comes to mine; 
although I am sure that there have been instances. That is 
sometimes reflected in either the written opinions of our 
administrative law judges, or even perhaps in the board's own 
decisions after reconsideration, where comment will be made: 
the employer has argued persuasively that, you know, this is a 
terrible rule, and we're doing the best we can. Our point is, 
if that's the law, we will enforce that. Your remedy is to go 
to the Standards Board. 

So, I think yes, there have been instances, and 
all we can do at that point is simply say, your remedy lies 
elsewhere . 

CHAIRMAN LOCKYER: Are there other questions? 

SENATOR LEWIS: Move confirmation. 

CHAIRMAN LOCKYER: We have a motion by Senator 
Lewis recommending confirmation. 


Did you want to close? You don't need to. 
You're doing fine. 

Call the roll. 

SECRETARY WEBB: Senator Ayala. 


SECRETARY WEBB: Ayala Aye. Senator Brulte. 


SECRETARY WEBB: Brulte Aye. Senator Hughes. 
Senator Lewis. 


SECRETARY WEBB: Lewis Aye. Senator Lockyer. 


SECRETARY WEBB: Lockyer Aye. Four to zero. 

CHAIRMAN LOCKYER: Good luck, sir. 

MR. GAZDECKI : Thank you very much. 

CHAIRMAN LOCKYER: We appreciate your service. 

MR. GAZDECKI: Thank you. 

CHAIRMAN LOCKYER: Okay, Mr. Nickols, I guess, is 
our other one for today. 

Hi, how are you today? 

MR. NICKOLS: Very well, sir. 

CHAIRMAN LOCKYER: It looks like you have a 
statement to start with, and that'd be fine. 

MR. NICKOLS: Yes, sir. Thank you. 

Good afternoon, Mr. Chairman and Members of the 
Committee. My name is John A. Nickols, N-i-c-k-o-l-s . Thank 
you for your time and this opportunity to meet with you. 

It's been an honor to serve these past eight 


months as Chief of the Bureau of Security and Investigative 

After many years in the private sector, it is 
both challenging and humbling to take a turn at public service. 
The Bureau of Security and Investigative Services, or BSIS, 
licenses more than 250,000 California individuals and businesses 
in seven distinct industries. They are the private patrol 
operators, security guards, private investigators, alarm 
companies, security training industry, locksmiths, and 
repossessors . We also provide the guard and alarm industry 
permits to carry fire arms. 

My work with the Los Angeles County Sheriff's 
Department spanned almost 20 years. During this period, I 
worked in almost all fields of law enforcement. I was a 
detective for 14 of those years. 

In 1983, I was hired by the Los Angeles Times as 
manager of security and served for 13 years as the Director of 
Security for the Times and the Times Mirror Company. The Times 
security programs closely paralleled the private patrol operator 
business that BSIS regulates. 

During this period at the Times , I was 
responsible for the installation of intrusion alarms in both 
residential and commercial buildings owned by the Times Mirror 
Company. I also designed a security and access control system 
for the Denver Post and the Baltimore Sun newspapers. 

During this period with the Times , I was also 
actively involved in community security programs, working with 
law enforcement and the commercial security industry. 


I have achieved several successes since joining 
the Department of Consumer Affairs and have opened a meaningful 
dialogue with the regulated industries to increase consumer 
awareness and to reduce consumer complaints. The Bureau has 
eliminated its backlogs in licensing. 

My priority is to focus on consumer protection by 
fostering a public and private cooperative effort with the 
industry actually involved in self-policing in the reporting of 
unlicensed activity. Unlicensed activity endangers the consumer 
who deals with a vendor whose employees have not undergone 
proper training or criminal background checks. 

As our law enforcement resources have been 
stretched, the public has come to rely increasingly on the 
private security industry for many services historically 
provided by peace officers. This is a growing business. 
Ironically/ the industry attracts a disproportionate number of 
individuals with criminal histories. 

The Bureau's most important function is the 
background checks it performs, 16,000 each month. This is a 
critical factor in ensuring Californians access to reliable and 
safe security services. 

I'm pleased to have this opportunity to improve 
that protection for our citizens. Thank you for your time, your 
attention, and I ' d be pleased to answer any questions you may 
have . 

CHAIRMAN LOCKYER: Are there questions? Senator 

SENATOR AYALA: Mr. Nickols, how many licenses or 


registrations did the Bureau deny last fiscal year to persons 
who were seeking a license or registration as private 
investigators or private security guards? Do you have any idea 
how many of those you denied? 

MR. NICKOLS: We generally lose about seven 
percent. They get rejected because of a criminal background 
problem. That also includes spousal abuse, especially if 
they're going to try and hold a guard card with a gun permit. 
We turn them down if they have spousal or domestic abuse in 
their backgrounds. 

SENATOR AYALA: That was my next question, what 
grounds are applicants denied a license? You just answered 
that, because of criminal activity in the past, or records that 
are not what they ought to be for a person doing that kind of 

Are those most of the denials, for that reason? 

MR. NICKOLS: The denials for a security guard 
and primarily for security officers, it's a criminal background 
of one sort or another. There's a lot of things that can kick 
them out of the park: theft, misbehavior like that, assaults, 
and again, domestic abuse. Domestic abuse is a big one in 
California, which has now gone nation wide. 

SENATOR AYALA: Is that an increase or decrease 
of denials from the year before? 

MR. NICKOLS: It would be an increase. 

SENATOR AYALA: How many disciplinary actions 
were taken such, as license revocations, that the Bureau has 
taken in the last fiscal year? Does this reflect any trend, the 

types of discipline actions you've taken? 

MR. NICKOLS: The background on that is that we 
have two disciplinary review boards. One is for the security 
officers and the PPOs, and then we have another group of what 
they call DRC, with the alarm industry. 

The figures are just about static from one year 
to the next. We have more issues involving discipline with the 
security guards than we do with the alarm industry or the 
private patrol operators. 

SENATOR AYALA: You said roughly about seven 
percent. Is that pretty -- 

MR. NICKOLS: That's about -- that's pretty close 
to being on target. Senator. 

SENATOR AYALA: Thank you. 

MR. NICKOLS: Thank you. Senator. 

CHAIRMAN LOCKYER: Are there other questions from 

What kind of complaint history is there? That 
is, not where you deny a new application, but you hear from some 
consumer or business? Are there many complaints of that sort 
that come in? 

MR. NICKOLS: We do get consumer complaints on 
all seven industries, and the security officers lead the pack 
because they're always getting themselves into some type of 

The alarm groups generally has to do with over 
selling a contract, or the consumer doesn't realize what they've 
bought into. But the security guards, because of nature of what 


they do, they're right up there with the — 

CHAIRMAN LOCKYER: So, there's some argument or 

MR. NICKOLS: They get into trouble more often. 

CHAIRMAN LOCKYER: Can you quantify those 
complaints against security guards? How regularly do you get 
one of those? 

MR. NICKOLS: I would say there's several hundred 
a year. There's quite a few, but it's not as many as you would 

Most of them are resolved through mediation. 
Some of them are resolved by field investigations, and some of 
them are resolved by them losing their licenses lenses. 

CHAIRMAN LOCKYER: Let me ask one more time, 
other questions, anyone that wishes to comment either for or 

We have no opposition that's been filed. 

Senator Brulte moves confirmation. 

If you'll call the roll. 

SECRETARY WEBB: Senator Ayala. 




Ayala Aye. Senator Brulte. 


Brulte Aye. Senator Hughes. 

Senator Lewis 


SECRETARY WEBB: Lewis Aye. Senator Lockyer. 



SECRETARY WEBB: Lockyer Aye. Four to zero. 

CHAIRMAN LOCKYER: Thank you very much, Mr. 
Nickols. Good luck to you. 

MR. NICKOLS: Thank you. Senator. I appreciate 
your time, all of you. 

CHAIRMAN LOCKYER: We appreciate your service. 

[Thereupon. This portion of the 

Senate Rules Committee hearing was 

terminated at approximately 2:55 P.M.] 
— ooOoo — 



I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 


day of 


, 1997 

"shorthand Reporter 


Additional copies of this publication may be purchased for $3.00 per copy 
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Senate Publications 

1020 N Street, Room B-53 

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Please include Stock Number 322-R when ordering. 


{/wo ■ ly 





ROOM 113 


MONDAY, APRIL 21, 1997 
1:56 PM. 

MAY 1 3 1997 

SAN FR^?4O?Se0 





ROOM 113 


MONDAY, APRIL 21, 1997 
1:56 P.M. 

Reported by 

Evelyn J. Mizak 
Shorthand Reporter 










GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NANCY MICHEL, Consultant on Governor's Appointments 


SYED P. ALAM, Member 
Industrial Welfare Commission 

Industrial Welfare Commission 

Private Counsel for MR. ALAM 


California Manufacturers Association 


California Chamber of Commerce 


California Farm Bureau Federation 


California Labor Federation, AFL-CIO 


California Trucking Association 

California Nurses Association 



Professional Engineers in California Government 



Teamsters 228 and 952 

Youth Authority 


Chicano Correctional Workers Association 


Chief Probation Officer 

Contra Costa County 


Chief Probation Officers Association 

City of Davis 

Association of Black Correctional Workers 

County of San Diego 

REGIS LANE, Executive Director 
Minorities in Law Enforcement 

EMILY KATZ, Vice President 
California Emergency Foodlink 


California Correctional Peace Officers Association 

ROBERT CEBALLOS, Past President 
Mexican-American Correctional Association 

CRAIG BROWN, Director 
Department of Finance 

CDC Hot Team 

SILAS MARIANO, Business Administrator 
Youth Training School 
California Youth Authority 





Proceedings 1 

Governor ' s Appointees ; 

Taken Together: 

SYED ALAM, Member 

Industrial Welfare Commission 1 

Background and Experience 2 


Industrial Welfare Commission 1 

Background and Experience 3 

Questions by CHAIRMAN LOCKYER to MS. BLACK re: 

Receipt of Letters and Testimony from 

Those with Labor Perspective 6 

Hours of Hearing on Over-time Issue 7 

Questions by SENATOR HUGHES to MS. BLACK re: 

Letter of Recognition or Resignation 10 

Questions by SENATOR LEWIS to MS. BLACK re: 

Number of People Affected 10 

Definition of People Affected by 

Over-time Decision 11 

How Many of Those Affected Did not Receive 
Over-time Last Year 12 

Reaction of Restaurant Employees 13 

Questions by CHAIRMAN LOCKYER to MS. BLACK re: 

Wage Orders Covering Restaurant Employees 15 

Statements by CHAIRMAN LOCKYER re: 

Information from CEOs Applying for Exemption 
under Current Law 15 

Questions by SENATOR AYALA to MS. BLACK re: 

Interpretation of IWC ' s Mission 16 

Response by MR. ALAM 17 

Questions by SENATOR AYALA to MR. ALAM re: 

Representative of Organized Labor on IWC 18 

Questions by CHAIRMAN LOCKYER to MS. BLACK re: 

Orders Affecting Waiters 21 

Questions by SENATOR BRULTE to MS. BLACK re: 

Areas of Employment not Covered by 

8-hour Day Rule 21 

Coverage of Farmworkers 22 

Responses by MR. ALAM: 

Mining Industry Is Exempt 23 

Percentage of California Workforce 

Impacted by New Wage Orders 24 

. Union Workers not Impacted 26 

Questions by CHAIRMAN LOCKYER to MS. BLACK re: 

Number of Letters from Workers 27 

Sufficient Commentary in Public Record 

to Justify Votes 29 

Impact on Worker Safety 30 

Questions by SENATOR BRULTE to MS. BLACK re: 

California's Definition of Injury 31 

Any Attempts by 47 Other States to Conform 

to California's 8-hour Over-time Rule 31 

Questions by SENATOR AYALA to MS. BLACK re: 

Conditions of Farmworkers 33 

Questions by CHAIRMAN LOCKYER to MS. BLACK re: 

Types of Crops Grown on Family Farm 34 

Commission's Refusal to Endorse Knox 

and Solis Bills 35 


Response by MR. ALAM 36 

lestions by SENATOR BRULTE to MS. BLACK re: 

Adoption of Resolutions to Recommend 

Bills to Legislature 36 

Witnesses in Support; 


California Manufacturers Association 37 


California Chamber of Commerce 4 


California Farm Bureau Federation 42 


California Trucking Association 48 

Questions by CHAIRMAN LOCKYER re: 

Number of Trucking Employeed 

Affected in California 48 

Basic Rules that Apply to 

Truckers 49 

Witnesses in Opposition: 


California Labor Federation, AFL-CIO 42 


California Nurses Association 49 


American Federation of State, County and 

Municipal Employees (AFSCME) 50 


Professional Engineers in California Government 50 

Questions by SENATOR AYALA re: 

Why Must Labor Representative 

on IWC be Union Member 51 


Teamsters 228 and 952 52 


Questions by SENATOR HUGHES to MS. BLACK re: 

Family Involved in Agriculture 53 

Right of People to Work Over-time and 

Receive Over-time Wages 54 

Votes on Agricultural Issues 55 

Motion on Voluntary Over-time 60 

Motion on Child Care Expenses 61 

Questions by SENATOR BRULTE to MS. BLACK re: 

Date of Next Public Meeting of IWC 64 

Questions by SENATOR HUGHES to MR. ALAM re: 

Position on Motions for Voluntary Over-time 

and Child Care 66 

Position on Knox and Solis Legislation 69 

Response by MS. BLACK 73 

Questions by SENATOR LEWIS to MS. BLACK re: 

Home Phone Number Published 74 

Opportunity to Put Anything Else 

on Record 76 

Questions by CHAIRMAN LOCKYER to MS. BLACK re: 

Problems with Flex Time under Current Law 80 

Need to Change Regulation to Allow Flex 

Time , not Law 81 

Rebuttal of MR. RANKIN by MR. ALAM 84 

Statements by CHAIRMAN LOCKYER re: 

Injury Statistics 85 

Intention to Vote No on Confirmations 85 

Commission Exceeded Statutory Authority 86 

Lack of Support for Knox and Solis Bills 87 

Labor Representative Slot 87 

Motion to Send Nomination of MS. BLACK to 

Senate Floor with Recommendation Not to Confirm 88 



Committee Action 88 

Motion to Send Nomination of MR. ALAM to 

Senate Floor with Recommendation Not to Confirm 89 

Committee Action 89 


California Youth Authority 89 

Witnesses in Support: 

FRANK R. SEARCY, President 

Chicano Correctional Workers Association 89 

TERRENCE STARR, Chief Probation Officer 

Contra Costa County 90 


Chief Probation Officers Association 91 


City of Davis 91 


Association for Black Correctional Workers 

Sacramento Area 92 


San Diego County 92 

REGIS LANE, Executive Director 

Minorities in Law Enforcement 94 


California Emergency Foodlink 95 


California Correctional Peace Officers Association ... 96 

ROBERT CEBALLOS, Past President 

Mexican-American Correctional Association 97 

CRAIG BROWN, Director 

Department of Finance 97 


CDC Hot Team 98 


Teamsters 99 


witness in Opposition; 

SILAS MARIANO, Business Administrator 

Heman J. Stark Youth Training School, Chino 

Youth Authority 100 

Questions by SENATOR AYALA re: 

Appointment of All Superintendents 

by ALARCON 109 

Problems at YTS Occurred under 

Many Superintendents 110 

Tenure of MR. VANDER WEIDE Ill 

Some Problems at YTS Caused by 
Negotiations with CCPOA 112 

Questions by SENATOR BRULTE re: 

Definition of M Cases 113 

Youth Authority Institutions 

with M Cases 114 

Current Status of M Cases 115 

Prior to M Cases being Transferred 

to CDC, Lock-down Status at YTS 115 

The Key Process for Keeping 

Track of Employees 115 

Current Policy with Respect to 

Keys and Tracking Employees 117 

Personnel File with Respect to 

Ratings 117 

Position at YTS 118 

Background at Youth Authority 118 

Hiring of Lieutenants 119 

Only Person Speaking in Opposition .... 120 

Witnesses in Support: 


LENNY GOLDBERG, Lobbyist 123 

statements by CHAIRMAN LOCKYER that Confirmation 

of ALARCON Will Resume on May 5 124 

Termination of Proceedings 125 

Certificate of Reporter 126 

— ooOoo — 

CHAIRMAN LOCKYER: We're going to start today 
with gubernatorial appointees, because there are people who are 
waiting to be heard on those matters. We have two members of 
the Industrial Welfare Commission and the Director of the Youth 
Authority for consideration. 

So, staff may have assumed one thing, and I'm 
planning to do another, which is to hear the two IWC appointees, 
that discussion first, and then subsequently Mr. Alarcon. 

So, if there are people who want to try to 
schedule that have an interest in one or the other, that's the 
order of things. Then we'll go back to legislation and the 
other topics. 

So, we'll just take a moment or two to give an 
opportunity for Mr. Brulte to join us. 

I think the Governor's staff indicated that we 
could interview both appointees at once. It's up to them if 
they prefer to be in any order. 

Good afternoon. Nice to have you with us. What 
we normally start with is, a person is asked if they want to 
make some brief introductory comment, just a general comment, 
and then have other testimony and questions. 

I saw you on television last night on one of 
these issues that you are so involved in. You did your part 
quite well. 

Should we do this alphabetically? 

MS. BLACK: It's great with me since I'm second. 

CHAIRMAN LOCKYER: I guess that means Alam is 

MR. ALAM: Good afternoon, Mr. Chairman and 
Senators. May name is Syed Alam, S-y-e-d, first name, and I am 
a graduate from Sac. State. I did my Master's in 1986, and I 
have experience of over 22 years in the construction and in the 
litigation field. Right now I'm working with the Department of 
Corrections as Associate Mechanical Engineer, rank and file 

I accepted the position of IWC Commissioner in 
May of 1996. I attended my first meeting on May 17, 1996. I 
abstained from all the votes on my first day. 

At that time, the Commission had held hearings on 
over-time and voted on May 17th to select the wage boards for 
the wages orders one, four, five, seven, and nine. 

At present, I know the pressing issue is that of 
over-time, and it's like a sword over my confirmation. I joined 
the Commission with an open mind and desire to serve not one 
group, but all the people of California who deserve nothing but 
the best. 

As an engineer, I believe in factual evidence and 
conduct a full investigation before making a final decision. I 
studied all the pertinent records regarding over-time, all the 
testimony and the expressly opposed, and then I reached a 
conclusion that I'm sure that the labor is not happy with that. 
But I did my homework. I think that is how I take every 
problem, very seriously, every issue very seriously. I try to 
do my best, and try to make the best decision that I could. 

I call myself a true laborer because I use my 
brain and hands to prepare projects which are constructive in 
nature. I could never think to destroy anyone. 

What can I say, that I'm fully aware of the labor 
issues handled by advocacy, and have great compassion for the 
labor. I strongly support increase in minimum wage, and will 
vote for increase it whenever it comes for voting. 

Regarding over-time, we've got testimony in the 
records that others have presented to convince me that the 
eight-hour day is the only way to go. Believe me, that I will 
be first one to work for it. 

It was an honor to serve on the Commission, and 
it's my pleasure to be here today. Thank you. 

CHAIRMAN LOCKYER: Thank you, sir. 

I guess maybe an opening comment would be the 
right way to do this. I'm not quite sure when there's two at 

MS. BLACK: Thank you, Mr. Chairman, Members. My 
name is Robyn Black. I have been the Chairperson of the 
Industrial Welfare Commission for two years. I was originally 
appointed in 1994 and confirmed by this body — not to be 
repeated, I'm sure, today — but once by unanimous vote. 

I stand before you again today very proud of the 
work that I've done on the Commission for last three years. I 
have -- when I originally was asked if I ' d be interested in 
serving on the Commission, I had no idea three years ago — 

CHAIRMAN LOCKYER: How much fun it would be. 

MS. BLACK: How much fun it would be, absolutely. 

Over the last three years, this particular issue 
has been a huge challenge. I promised the Members of this 
Rules Committee two years ago, when I sat before you for 
confirmation, that I would be fair, and that I would come to 
this position with no immovable positions, that I would learn 
the issue, and learn it as well as I could from both 
perspectives, not just the perspective of the employer's seat, 
for which I represent. 

I understand the mandate of the Industrial 
Welfare Commission. I understand it is to protect the health 
and welfare of employees. 

But it further goes on to state that it should be 
done without causing undue hardship to employment opportunities 
in the state. 

What I've experienced over the last few months 
has been phenomenal. I think it's been beyond description to 
somebody who's not been through this. 

For the last four months, as we've tried to 
address this issue, I have continually asked members of labor to 
help me understand, to sit down and talk with me on the issue, 
to work with me for a better policy and a policy that provides a 
solution that maybe all sides can support. 

I have never been contacted, with the exception 
of Assemblyman Wally Knox, and running into individuals in the 
hallway and having brief conversations with them, I have never 
been contacted by anyone to really try to work on some kind of 
equitable solution. 

What I have been is threatened. I've been 


threatened at home. My home phone number has been published. 
My twelve-year-old son, who sits and works at the computer in my 
office, has had to listen to the threatening phone calls on my 
answering machine. I have had threats at hearings. I have had 
obscenities yelled at me that would embarrass a sailor. 

And to this date, nobody has still yet sat down 
and tried to talk to me about the policy and the policy 
challenge that not only the IWC has tried to deal with, but this 
Legislature has tried to deal with for many years. 

And ultimately, on Friday, April 11th, at the end 
of that board meeting, a man confronted this Commission with a 
loaded .38. He is now in jail for attempted murder. 

Ironically, what that man said to me just before 
he pulled that gun was that he didn't even think this over-time 
issue was going to hurt anybody. He didn't think that it going 
to have impacts on anybody because he perceived that employers 
in California were not scheduling over-time anyway; how we set 
the hours didn't matter to him. He was truly angry at 
government . 

CHAIRMAN LOCKYER: We've all had this, and I 
think it's an almost universal experience those of us in public 
office, though it's horrible to hear when it happens to 
volunteers like yourself. 

MS. BLACK: I appreciate that. 

Again, as I stand, and I won't take a lot of time 
with opening comments because I'm guessing that you might have 
some questions for us today, but what I promised this body two 
years ago is that I would be fair. 

And I would offer to you, as I stand before you 
again today, that I still believe that I have been more than 
fair. I have listened to all of the public testimony. I have 
read every letter. I have stayed hours after these hearings 
were scheduled so that everyone that came to speak could be 

CHAIRMAN LOCKYER: Ms. Black, would you try to 
help me understand. 

You started by saying you've been open to hearing 
from people who are on the other side of the issue, and that 
hasn't occurred. But you just mentioned that you've read the 
letters and heard the testimony. 

Weren't some of those people that you were 
listening to of a different point of view? That is, the 
whatever you might call it here, the labor perspective? 

MS. BLACK: I would say that yes, they were 
individuals who both supported and opposed the proposal. 

CHAIRMAN LOCKYER: So, you've heard a lot of 
comment from people on both sides of the issue, is my point. 

MS. BLACK: I've been involved in this issue for 
18 months, Mr. Chairman. 

CHAIRMAN LOCKYER: I just didn't understand your 
opening comment that you wanted someone from labor to work with 
you, but you've never heard from them. 

MS. BLACK: No, from those who oppose the plan or 
the proposal, or opposed the change, I would say from my 
experience that the most vocal opponents have been members who 
represent labor in some form or another, or who belong to a 

labor union. By and large, that has been the greatest voice of 

So, I've asked those groups, and the leaders of 
those groups, to take the time to sit down and talk with me 
about the policy. 

And I would ask you to please ask the members as 
they speak against my confirmation today if in fact they knew 
that I wanted to meet with them to talk about the policy, and if 
they ever acted. 

CHAIRMAN LOCKYER: You just said you've gotten 
lots of letters, and you stayed after and talked to anyone, and 
heard all the testimony. 

I don't know how many hours, but weren't there a 
lot of hours of hearings? 

MS. BLACK: Yes. 

CHAIRMAN LOCKYER: How many do you think, hours? 

MR. BLACK: Just on the preliminary hearings, 
there were five investigatory hearings. On the hearings on the 
proposal, there were three additional hearings and two public 
meetings at which time I allowed public comment as well. 

CHAIRMAN LOCKYER: So, how many hours do you 
think that comprises in total, just in public session? 

MS. BLACK: They were, what, six hours, most of 
the hearings, so I would say 20, 22 hours total. 

CHAIRMAN LOCKYER: Just the public hearings. 

MS. BLACK: On public hearings on the proposal, 
that was in the three hearings. And then, the investigatory 
hearings that were also held, as I said, there were five of 



CHAIRMAN LOCKYER: Plus staying after and the 
mail. It sounds like you devoted a few hundred hours to 
thinking about this issue and talking people? 

MS. BLA.CK: At minimum a few hundred hours. As I 
said, Mr. Chairman, I read every letter. I read the reports. I 
read the studies. I sought out information on my own. 

I tried to bring every effort of due diligence to 
this issue because I took the issue very, very seriously. I 
knew that our decision would impact potentially 8 to 9 million 
people. That's not a decision that you take lightly. 

And in closing, I'll try to wrap this up as 
briefly as I can, as I said, I promised this body two years ago 
I would be open minded. 

I would also suggest to you. Senator Lockyer, 
that in January, one of the other proposals was the proposal 
that had to do with the definition of primarily. That pertains 
to how, under California law, we define whether an employee's 
exempt or not exempt from over-time pay. 

The proposal, and a proposal that I moved, would 
have brought California into compliance with the federal 
standards, and potentially, some say that, yes, it's easier in 
terms of conformity. Yes, there were some benefits for 
employees who might be titled manager in their resume, and their 
stature might go up, greater job opportunities following that 
particular job. And also being able to bring some kind of 
cohesiveness to a work group, which is what we're seeing many 
times in the private sector. 

That proposal to change the definition of 
primarily I saw has having great impact. I had several 
conversations with emblyman Wally Knox, and Assemblyman Knox 
explained to me the downside of that proposal, the potential 
that employees could be abused under that, given a new title and 
not allowed to earn over-time. 

I voted at the April 11th hearing to reject my 
own proposal. 

I would submit to you in closing that I 
understood my mandate. I believe I followed it with all due 
diligence possible. I had an open mind. I listened to people, 
and I changed my mind when the arguments were such that I agreed 
with what they had to say. 

I think it's a shame that I didn't have the same 
opportunity to talk further with members of labor in a 
nonhostile environment of a hearing, but to really sit down and 
talk about the issue. 

I would tell you that I had promised my family 
after last Friday's hearing that that would be my last day on 
the roll of the Commission. It's not worth it. It's not worth 
explaining to your twelve-year-old child why somebody pulled a 
gun on his mother. 

I didn't want to come to this body today. I 
thought I would just send a simple letter of recognition [sic], 
given all that I had been through, but I couldn't do it, because 
I believe in what I did. I believe I did my job to the best of 
my ability, and I believe I — with all my heart and soul, that 
the decision that I ultimately decided was in the best interests 


of the 8 million employees in California who have continued to 
ask for this kind of flexibility in their work schedule. 

So, I'm proud to answer any of your questions. I 
thank you for your time, and it's a pleasure to be before you 

SENATOR HUGHES: Senator Lockyer. 

What was the letter? You said you thought you'd 
send in a letter of recognition? 


SENATOR HUGHES: Resignation, is that what you 

meant to say. 

do that? 




MS. BLACK: Yes. 

CHAIRMAN LOCKYER: I assume some urged you not to 

MS. BLACK: No, it's a decision I came to on my 

CHAIRMAN LOCKYER: No one urged you not to do 

MS. BLACK: No, it's a decision I came to on my 

CHAIRMAN LOCKYER: I think there are people that 
want to testify. Do you want to ask some questions first or 
hear testimony? 


You used the figure of 9 million people could 
potentially be affected. I believe that was the figure, 8 or 9 

MS. BLACK: It's approximately, from what I 


1 understand, eight and a half million. 

2 SENATOR LEWIS: In a pool of employees, what is 

3 e exact definition of that pool of employees? Those are 

4 people that don't have labor contracts? 

5 MS. BLACK: That's the number of people that are 

6 covered by the Industrial Welfare Commission's orders, 

7 approximately. There are 15 industry orders and — industry and 

8 occupation orders. Those are the individuals who are exempt — 

9 excuse me, nonexempt employees. They're not managers; they're 

10 hourly employees. 

11 This decision also did not affect members of 

12 labor unions, public sector employees, and so there's a certain 

13 number that needs to be excluded out of that. 

14 Again, when I looked at this, you're charged 

15 often by labor as not representing the opinions of labor to 

16 protect employees. But there are 85 percent of that 8 to 9 

17 million member workforce that don't have the ability to have 

18 this flexibility in scheduling, that those who work under a 

19 collective bargaining agreement, or those who work for the 

20 public sector have. 

21 So, I believe we did our job in looking at those 

22 who did not have this through a collective bargaining agreement 

23 or through their employment, but yet would like to have had this 

24 change. 

25 SENATOR LEWIS: Part of the crux of the debates 
2 6 centers on the fact that there are some employers, for an 

27 example, some employers that work in an industry where they have 

28 a very thin margin of profit, that, under current law, there's 


disincentive for paying over-time. 

I'm just curious, do you have statistics out of 
that pool of eight and a half or nine million people, how many 
did not receive any over-time during the last year? 

MR. ALAM: I can answer to this. 

I think there are 8.1 million covered workers who 
are members of the unions, and only 10 percent of them get 
over-time . 

SENATOR LEWIS: I'm sorry, only what? 

MR. ALAM: Only 10 percent of those workers get 
over-time. That's the statistics from the pool that was 

MS. BLACK: Senator Lewis, there were several 
studies what were submitted to the Commission. Some of them 
were independent. Some of them were conducted by businesses. 
But specifically, there were two studies submitted to the 
Commission, one by Professor McCarthy, and one that's also 
referred to as the Trejo study. 

Both of those two particular studies looked at 
the effects of the over-time rule as applied to men in 1980. 
And both of the studies concluded there was a significant loss 
in over-time hours earned because of the restrictive rigidity of 
the eight-hour rule. 

We also looked to other states and information 
from the 47 other states that have the forty-hour work week, and 
there was nothing there to suggest that California employees 
were earning more over-time. There was nothing to suggest that 
there was greater incident of accidents and injury. In fact. 


California is higher. And there was nothing to indicate that it 
would have implications on unemployment. 

I looked at both studies, and although some 
people have drawn a conclusion from the Trejo study — this $1 
billion, or $833 million — that is, in fact not in the Trejo 
study. That's a conclusion that others reached after reading 
his report. 

In fact, Mr. Trejo spoke to the Commission at the 
final hearing in Los Angeles and concluded with the fact that he 
didn't see the potential for great loss. He didn't think it was 
going to have that big of a difference on over-time hours worked 
because employers avoid paying a 50 percent penalty on labor 
costs, regardless of how it's scheduled. 

So, there was a great deal of effort that we 
looked at, because that was certainly one of my concerns. You 
don't protect the health and welfare of employees by giving them 
a pay cut. 

I would submit to you that the information 
submitted by recognized economists, an economist that this body 
is using. Dr. McCarthy, this body is using for their research on 
welfare. This is a credible body that said that there will not 
be and in fact could be an increase earning of over-time if we 
were to get rid of this rigid rule. 

SENATOR LEWIS: I had lunch at a restaurant in 
Orange County on Friday. The owner of the restaurant came over 
to me and told me the majority of his waiters at that particular 
restaurant in fact worked at an additional restaurant because 
they could not afford to pay over-time there. Yet, they would 


gladly stay at work at that one particular restaurant, but they 
go drive across town to work at a second restaurant. 

Are those the kinds of stories you hear quite 

MS. BLACK: As I said, Senator, I read every 
letter. I tried to research everything. 

When I go out to dinner, I drive my family crazy 
because I start asking people in the restaurant. I don't tell 
them why I'm asking. They just think I'm some nut that wants to 
know about, you know, if they like their hours and their 
conditions of employment. 

But yes, that was offered to us many, many times, 
specifically by employees and part-time employees in the 
restaurant industry. 

Lots of times they'd be students, or they'd be 
working a second job, so their work week was a compressed work 
week. And they found after eight hours, that they only had two 
days to work. Their employer sent them home. Where, if we 
waived this particular law, they could stay, and they could not 
only earn the additional hours from the employer, but in fact, 
they also made a great deal of their money in tips. So, if they 
were allowed to remain on the job for an extra couple hours, it 
wasn't just the hourly rate, but it was in fact tips. 

So, we sought out that information, I think. And 
again, I stand by the fact that all studies suggest that there 
really is not going to be any significant loss and potentially 
an increase. 

CHAIRMAN LOCKYER: Could I ask you, of the new 



wage orders on over-time, which one of them -- manufacturing, 
transportation, professional technical, mercantile, or public 
housekeeping -- are restaurants included in? 

MS. BLACK: It would probably be Order Five, 
public housekeeping. 

CHAIRMAN LOCKYER: Are you sure? 

MS. BLACK: Well, it depends on what job you hold 
in the particular business. 


MS. BLACK: Again, I mean, it depends on what you 
do. Many people do cross-over roles. 

CHAIRMAN LOCKYER: I understand. A waiter. We 
are talking about the waiters that have this burden. 

Does anyone here know? 

Well, so much for all the research and the 
examples . 

Did you ask. Senator Lewis, the gentleman if he'd 
had a vote of the employees to change the hours? 


CHAIRMAN LOCKYER: Let me tell you the 
information I got, because I went and looked at the files and 
was able to reach 109 CEOs or human resources people who applied 
in the last year for an exemption under the current law, the old 
law. One hundred percent of those business people said the 
current law worked fine, that they were able to work with their 
employees and get flex time scheduled under the existing law. 
One hundred percent of the businesses that bothered to do it 
last year.. 


Like the restaurant man who talks about it/ but 
doesn't apply or work with his employees, I find that 
interesting information. 

Senator Ayala. 

SENATOR AYALA: Mr. Chairman, according to the 
Industrial Welfare Commission, the Constitution of the State of 
California dictates that the purpose of this Commission is to 
provide for minimum wages and for the general welfare of 
employees. Doesn't mention employers. Also, investigating the 
comfort, health, safety and welfare of such employees. 

Let me just ask the both of you, what is your 
interpretation of the IWC's mission, your obligation to provide 
for the general welfare of employees? 

MS. BLACK: Senator, I understand your question, 
and I think as we spoke earlier this morning, we probably have a 
philosophical difference. 

SENATOR AYALA: I asked you this question this 
morning, but I want you to do it publicly. 

MS. BLACK: I was going to offer you an example, 
if I may, of how I live that mandate when I make decisions. 

There are 15 industry and occupational orders in 
California. Originally, when we began looking at this 
particular issue, we were looking at all 15 industry and 
occupational orders. 

As we went through those five investigatory 
hearings on the issue, there were orders, 11 and 12, for 
example, which made a strong case under broadcasting, motion 
pictures, that those employees in fact usually work for multiple 


employers in the course of a week, and therefore would 
potentially never hit a 40-hour work week. They would, in fact, 
proh .ly really see a loss of the wages that they earned. 

When we moved forward with the proposal, we did 
not include those industry orders, or occupation orders, because 
we felt that they would be prejudicial to the health and welfare 
of the employees covered by those particular wage orders. 

That's just one example. Senator, of my 
understanding of the mandate of the Commission, and how I 
applied that to the decisions that I made. 

And I read letters from many employees who said 
that, "This rigid scheduling is prejudicial to my being able to 
balance my work life and my professional life." 

So, in fact, I respect that you and I may not 
agree on the ultimate decision as it pertains to the 8-hour day, 
but I would hope that you would understand that I have 
demonstrated, according to what I believe and what I have 
experienced — and I worked under Wage Order 489 as a working 
parent — that I attempted at all times, in fact, to keep that 
mandate in mind. 

MR. ALAM: Yes, Senator, I think that you just 
stated the manifesto of the IWC. And I believe that I have done 
that by voting no on the primarily so that it should not be 
changed. For meal and lodging credit, I said no, we don't want 
to change it. And for the meal periods, you know, the time 
after 8 hours, I said no. 

So, it's not that I have not been doing anything 
from the labor interest. 

The only thing I think which goes against me is 
the over-time. Well, if you think that the over-time has 
changed, is going to devastate California, I really don't 
agree. Maybe we are talking two different philosophies. 

But I think I have done my homework. I have 
studied. I have listened to the testimony. I tried to do my 

I'm a very independent minded person, and I don't 
accept any influence because that's how I've been trained. I 
think, you know, that this 40-hour week actually has not 
decreased or will not decrease the over-time in California. And 
rather, it will enhance the job opportunities because I think 
the mandate also dictates that if they are — if you are putting 
undue hardships with employers, then you don't have more jobs. 
And if you don't have jobs, I mean, you forget about over-time. 

So, over-time just at the discretion of the 
employer. It's not your privilege, or something that you can 
ask by force from the employer. 

So, I think, you know, we even shouldn't be 
making our budget based on over-time because it can be changed. 
The over-time situation keeps changing. 

So, in my opinion, if that's your thinking, it 
has a disservice to the people of California, then of course I 
am guilty. But otherwise, I think I've made the right decision, 
and it's in the welfare of the people of California. 

SENATOR AYALA: You are the representative of 
organized labor on that Commission; are you not? 

MR. ALAM: I was — I'm not a member of organized 


labor, but I'm a member of professional engineers union. 

SENATOR AYALA: Don't you represent labor on the 

MR. ALAM: Yes, I do, but I also represent people 
who are not member of the organized labor, so I have this 
advantage that I have access to all of the people of California 
who are workers but are not members of this organized labor. 

SENATOR AYALA: You've been a member of the union 
off and on for number of years? 

MR. ALAM: Yes, that's correct. 

SENATOR AYALA: In what sense do you consider 
yourself their representative with the voting you've been 
experiencing on that Commission? 

MR. ALAM: Excuse me. Senator? 

SENATOR AYALA: How do you think you represent 
labor with the votes you've been casting on that Commission? 

MR. ALAM: Senator, as I said, I mean, if you see 
my voting record, it's not that everything has been against the 
labor. I have a lot of compassion, and because I am labor 
myself, I know I'm going against myself. If I am finishing this 
over-time, I am also putting — throwing the eggs on my feet. I 
mean, how can a person do that? 

I think if you see the things in the bigger 
prospective, you will realize that for the benefit of the 
majority, sometime you have to take decisions which are not 
welcomed by everybody. 

Yes, I think I was representing all the labor, 
because I go through the issue which confronts the labor very 


seriously. It's not that I don't know acronyms/ this means I am 
not aware of the issues. Issues to me are very important, and I 
studied them thoroughly before making my mind. 

SENATOR AYALA: It's hard to understand how you 
consider yourself a representative of labor when every union is 
in opposition to your continuing on the Commission. 

MR. ALAM: The irony of the fact is that union is 
the least effected of this ruling of IWC, which has filed a 
lawsuit against me. 

I have always been, you know, the state workers 
have always been on the 40-hour week, like people under 
construction, and the mining, and the drilling. I mean, not 
everybody's covered with this 8-hour week — 8-hour daily 

I mean, I never got over-time after 8 hours, but 
this does not prevent me from thinking that people who are 
getting it, and who are benefitting from it, but what about the 
so many things which go along with this over-time? It's not 
just that, okay, I'm losing my money, but what are you getting 
in return, and what people are demanding? What is the trend, 
and how things are changing. 

So, these things, you know, combined, made me 
think that 40-hour week was the way to go on this. 


MS. BLACK: I just want to follow up on a 
question you had asked me, and I wasn't sure. 

You were talking about Order Seven, which is the 
retail order. Is there something else that you wanted to ask me 


1 in regards to that? 

2 CHAIRMAN LOCKYER: No, I was talking about the 

3 April 11th vote, c through five. It has industries one 

4 through five. The ones I mentioned are what were — 

5 MS. BLACK: The one, four, five, seven, and nine. 

6 But I thought you were specifically going to ask a question 

7 pertaining to Order Seven? 

8 CHAIRMAN LOCKYER: No, I was trying to find out 

9 where the waiters are, since we were talking about waiters. It 

10 seems like they're not — 

11 MS. BLACK: I was asking about retail. There was 

12 something else that you were going to ask in regard — 

13 CHAIRMAN LOCKYER: No, I was trying to find the 

14 waiters. That seems to be what motivates everybody, but they 

15 seem to not be affected by any of the orders that you just made. 

16 An example that we hear routinely that seems to have nothing to 

17 do with the product of your work. 

18 Senator Brulte. 

19 SENATOR BRULTE: Ms. Black, could you lay out for 

20 me the groups in California, or the areas of employment in 

21 California, that are currently not covered by the 8-hour day? 

22 MS. BLACK: You're talking about those who are 

23 exempt under a collective bargaining agreement? 

24 SENATOR BRULTE: Sure, those who are exempt. I 

25 mean, this doesn't apply to all categories. There are some 

26 categories that have a 40-hour week currently; is that correct? 

27 MS. BLACK: You're talking about executives, 

28 doctors, lawyers, and individuals who are not covered through 


the wage orders? Or, in addition, are you asking me about the 
other orders, such as the motion picture industry? 

SENATOR BRULTE: I'm asking you right now, under 
California law, and under statute and regulation, does every 
employee in California get over-time after 8 hours? 


SENATOR BRULTE: Who wouldn't today? Your order 
doesn't take effect until January 1; is that correct? 

MS. BLACK: I believe yes, that we're not going 

to do it -- 



SENATOR BRULTE: Who doesn't get it today? 
MS. BLACK: Who doesn't get over- time after — 
SENATOR BRULTE: Yes, who wouldn't get over- time 

If I'm a farmworker, do I get over-time after 8 


MS. BLACK: No, you have a 10-hour work day and a 
60-hour work week. 

SENATOR BRULTE: Why is that the case? 

MS. BLACK: I believe that that was an issue that 
was addressed through the Legislature because of the 
perishability issue pertaining to agriculture. The federal 
standard as well for agriculture is a 10-hour, 60-hour — 
actually, it's a 60-hour work week. I don't believe they even 
have a 10-hour day. 

SENATOR BRULTE: The Legislature established the 
60-hour work week for farmworkers? 

MS. BLACK: It was done before I was involved 


1 with the Commission/ but if I recall — no, it probably was 

2 through the Industrial Welfare, or through the Commission order. 

3 But again, I apologize. Senator Brulte, I wasn't 

4 on the Commission at the time that issue was dealt with. But I 

5 believe it was, in fact, dealt with through their industry order 

6 specifically. 

7 As a matter of fact, when this change was brought 

8 to the Industrial Welfare, they wanted to extend it to two other 

9 wage orders — handling food products after harvest, and the 

10 other agricultural order — so that it would be concurrent with 

11 the original order for the farmworker on the farm, to extend the 

12 60-hour work week to those individuals. The Commission chose 

13 not to do that. 

14 SENATOR BRULTE: So, today, farmworkers don't 

15 have 8-hour over- time protection. 

16 What other employees wouldn't. 

17 MS. BLACK: Again, a public employee. They have 

18 that flexibility within to be exempt from the 8-hour day. 

19 Legislative staff is exempt from the 8-hour day rule. 

20 SENATOR BRULTE: Certainly those that work for 

21 anybody on the Rules Committee. 

22 MR. ALAM: And construction workers, you know, 

23 people who work in mining. 

24 SENATOR BRULTE: Mining. Somebody that works in 

25 mining doesn't have 8-hour over-time? Why? 

2 6 MR. ALAM: I think these are exempt, and this is 

27 how the orders were created when, you know, the IWC was formed. 

28 And they found the different industries, you know, under 


different wage orders. Those industries were kind of exempt 
from the over-time. 

SENATOR BRULTE: The labor groups that represent 
agricultural workers, have they been pounding your door to get 
an 8-hour work day? 

MS. BLACK: No, not at my door. 

SENATOR BRULTE: How about miners? 

MS. ALAM: No. 


SENATOR BRULTE: Why is that? I know I'm asking 
you to draw a conclusion. 

MS. BLACK: Nor, I've been puzzled by the fact 
that nor have public employees, who enjoy this flexability. 

I can't answer that. I asked that question many 
times, if this was, in fact, so important, why, in fact, weren't 
others actually moving towards the 8-hour day, as opposed so 
many asking us to go to the 40-hour work week? And I never got 
a good answer to that. Senator Brulte. 

SENATOR BRULTE: If your order is implemented 
January 1, what percentage of the California work force will 
that apply to? 

MS. BLACK: Approximately 8 million. Well, it 
would be less than that, because I don't know that we've 
actually done the exact numbers of who will be impacted under 
one, four, five, seven, and nine. It will be the majority of 
the hourly employees in the State of California who are not 
otherwise exempt because of the collective bargaining agreement, 
or public employees, construction or miners, or agricultural 


1 field workers. 

2 SENATOR BRULTE : Will there be any category of 

3 California worker that receives over-time after 8 hours that 

4 have not negotiated it through the collective bargaining 

5 process? 

6 MS. BLACK: I would say few, if any, that I'm 

7 aware of. 


9 MS. BLACK: Again, those who are in the orders 

10 that are not impacted, the orders that we did not go into, 

11 certainly, that world will in fact remain for those individuals. 

12 And again, we did that, I think, because it was specific to the 

13 industry or occupation that we were addressing. 

14 But, in fact, and I'm not sure that I completely 

15 understand your question, but orders one, which covers 

16 manufacturing, four, five, seven, and nine, which include 

17 professional, technical and clerical, public housekeeping, 

18 retail, and transportation, that's probably the majority — 

19 representative of the majority of hourly workers in the state. 

20 SENATOR BRULTE: By and large, will most 

21 employees, then, be covered by this? Those who have already 

22 been exempted for whatever reason, and the ones that are covered 

23 by your orders, will most employees then have a 40-hour week? 

24 CHAIRMAN LOCKYER: A majority, whatever that is. 

25 SENATOR BRULTE: I'm confused. If this is such a 

26 burden on employees, I mean it seems to me every time there's an 

27 issue dealing with farmworkers before this Legislature, there 

28 are a number of people that rise to defend farmworkers. 


But you're telling farmworkers haven't had this 
protection for years. Is that what you're telling me? I'm just 
wondering where their advocates are? During the budget process, 
during committee hearings, there are always advocates for 
farmworkers here. I wonder where they are, where they've been? 

MS. BLACK: During the final hearings on the 
proposal that has been put forth since January, I did receive a 
letter, as all the Commissioners did, from the UFW, signed by 
Dolores Huerta, but that's really only been the only particular 
inquiry on behalf, or opposition letter, on behalf of 
farmworkers pertaining to this issue. 

I think there was one other letter that asked for 
it, but, I mean, two of thousands. 

SENATOR BRULTE: They opposed the 4 0-hour week? 

MS. BLACK: Yes. 

SENATOR BRULTE: But they have the 60-hour week? 

MS. BLACK: Yes. 

SENATOR BRULTE: Did they recommend going back to 
8-hour for their industry? 

MS. BLACK: I don't specifically recall in this 

In the investigatory hearings, there were a few 
letters that actually suggested that, but in the final phase of 
the hearings on the proposal, I don't recall. 

There were individuals who spoke. I think it was 
even at the last hearing in Los Angeles, that said, no, what we 
really want is in fact a 7-hour day, and then they said what 
we'd like is a 6-hour day. 




SENATOR BRULTE: If you'd like 14 -hour day, run 
for the Senate. 

MS. BLACK: I understand. 

I think I understand what you're asking, and the 
thing that I think we continue to look at as the Commission is 
that, yes, it was very clear that union workers didn't want this 
change in our regulations to occur. It was very clear. 

Yes, it was very clear from the union leaders 
that they did not want this change because they felt, although 
they're exempt because of their collective bargaining agreement. 
They suggested repeatedly through those hearings that they felt 
that they would lose that negotiating tool in their next 
negotiating agreement, or the next time that their collective 
bargaining agreement was up for renewal. 

Speaking to the other employees in California 
that are covered by the Industrial Welfare Commission orders, 
and that are nonexempt employees, it was very, very little 
opposition from those who do not have this already through a 
collective bargaining agreement, but they are impacted employees 
under the specific orders that were being considered for 
change. And with very few exceptions, the majority of those 
letters from those employees asked for, in fact, this kind of 
change and flexibility. 

CHAIRMAN LOCKYER: How many letters do you think 
you got from workers in total? Not a group or union, but just 
an individual letter from a worker. How many do you think you 


MS. BLACK: That's really difficult to say 
because many times there's form letters that come in. 

CHAIRMAN LOCKYER: We're used to that, too. 

MS. BLACK: Four hundred of these letters. 

But there certainly have been hundreds. When you 
consider that -- and I think what you're asking me is, separate 
the employer letters from the employee letters asking for this 
change. And I have several of them even with me. I was looking 
at them again today. 

There was — as far as the specific employee that 
wrote to the Commission, that was not covered under a collective 
bargaining agreement, that majority clearly spoke in favor of 
this change from the employees, not the employer. From the 
employee himself. 

CHAIRMAN LOCKYER: How many is that? 

MS. BLACK: Senator, it's hundreds, but I 
couldn't — I apologize for not having separated out, you know, 
of the thousands of letters. 

CHAIRMAN LOCKYER: I assume they're all on file? 

MS. BLACK: Absolutely, they're all part of the 
public record. 

CHAIRMAN LOCKYER: So, if someone wanted to go 
through them, they're part of the record? 

MS. BLACK: They're all part of the public 
record, absolutely. 

Senator, the other — and an issue that we have 
not necessarily addressed today. Senator Ayala our mandate. 

Unlike the Legislature, unlike yourselves, when 


you make a decision, you can make that decision based on your 
own opinion of that particular issue. 

As a Commissioner of the Industrial Welfare 
Commission, not only does it have to be something that's not 
prejudicial to the health and welfare of employees, but it also 
has to be something that's substantiated in the public records. 
It would be foolish for anybody on this Commission to have moved 
forward with the decision that anyone who wanted to look at the 
public record would clearly say, that was not in fact supportive 
of the decision. 

CHAIRMAN LOCKYER: My impression, having not been 
at all the hearings, but having received a staff summary of the 
commentary and so on, is that there is sufficient comment in the 
public record that would justify the no votes as well as the yes 
votes on this issue. That both sides can point to the public 
record for support for that view. 

MS. BLACK: I would say again, if I were 
considering those who were not impacted by the change, again, 
those outside of the collective bargaining agreement, that the 
employees definitely weighed on the side of asking for this 

But more importantly -- or, not more importantly, 
but in addition to that, when you look at the terminology and 
the language in our mandate, and it says, "will not cause undue 
hardship, harm, to employees or employment opportunities," it's 
a little bit of a wordy mandate, but the information, the 
statistical data, not just purely the desires, yes or no, I like 
this, I oppose it, but the health and safety issues, which are 


fairly easy to understand, they're there in clear data from 
other states, the economic studies — 

CHAIRMAN LOCKYER: The health and safety meaning 
what? That there are not more injuries when you work long days? 

MS. BLACK: That the other states, 47 other 
states who have the 40-hour work week as opposed to the 8-hour 
day, California in fact has a much higher accident, nonfatal 
illness -- or nonfatal injury rate than the majority of the 
other states, highly industrialized states that do not have this 
8-hour rule. So, it would suggest that the 8-hour rule does not 
necessarily impact worker safety. 

CHAIRMAN LOCKYER: Did you hear any alternative 
explanations of that? 

MS. BLACK: I continued to ask, Senator, 
throughout the 18 months, for information. 

CHAIRMAN LOCKYER: You never heard one? 

MS. BLACK: It was never suggested to me 

CHAIRMAN LOCKYER: That there might be another 
reason for more injuries here than in some of those other 

MS. BLACK: Senator, I can tell you that I asked, 
and it was not — 

CHAIRMAN LOCKYER: But you didn't hear any? 
MS. BLACK: It was not offered, no. 

CHAIRMAN LOCKYER: Your point was, there was 
health and welfare considerations. You were looking for data on 
that. I'm sorry I interrupted that thought. 

MS. BLACK: The only other thing in addition. 


1 going back to your health and safety question, is that I think 

2 for a lot of people, in fact, that was a surprise, because 

3 California has very strict requirements. 

4 CHAIRMAN LOCKYER: We have a stricter OSHA than 

5 in most states. 

6 MS. BLACK: Absolutely, so it was actually a 

7 surprise to me. 

8 I thought that the data would have, in fact, 

9 suggested that California had a much better record than the 

10 other states, and in fact I was surprised to find this out. 

11 CHAIRMAN LOCKYER: I'm sorry, but I don't know 

12 who gentleman is in the middle. Should we have introduced you 

13 here? Are you keeping these two apart? What's the idea? 

14 MR. MITCHELL: My name is Jeff Mitchell. I am 

15 legal counsel for the Commission and for Syed Alam in litigation 

16 that was filed a couple weeks ago. 

17 CHAIRMAN LOCKYER: So, if they need a lawyer, 

18 you're ready. 

19 Are you armed? 

20 MR. MITCHELL: I can run fast. 

21 CHAIRMAN LOCKYER: Senator Brulte. 

22 SENATOR BRULTE: We define injury differently 

23 than other states. That may be one of the variables. 

24 Be that as it may, when you looked at this, did 

25 you find any activity in the other 47 states to try to conform 

26 their 8-hour or their 40-hour over-time rule to California? 

27 MS. BLACK: Senator, that was one of the most 

28 puzzling aspects to me throughout this process. 


In 47 other states, states that have much higher 
percentages of union membership, that one might conclude because 
of the makeup of their legislatures, or the makeup of their 
executive branch, the administration of those states, it was 
very puzzling to me. States which you'd think would embrace 
labor, if in fact labor wanted to conform to the California 
8-hour day. 

I continued to seek out that information, and 
there was nothing that suggested that these employees in 47 
other states were not very happy with it. In fact, I saw no 
evidence of a movement on behalf of labor in any of these other, 
again, more unionized states, which some might say would be more 
friendly through their legislature to union concepts, that that 
was, in fact, an issue in any of those 47 other states. 

And in fact, Hawaii is now also looking at 
repealing their 8-hour day. So, if anything, some see this as a 
regressive movement. I see it as California being progressive 
for their workers. 

I understand this, in many people's eyes, is an 
historic law which dates back to the early 1900s. I'm a working 
mom. My life is much different than my 

great-great-grandmother's was 70 years ago. And the needs of 
most of the people I deal with are much different than they 

Again, it seems as though the trend is going to a 
40-hour work week. In fact, in the last several months, as 
Congress has debated the comp. time issue, I have been puzzled 
by watching labor leaders in other states stand up and talk 


1 about the virtues of the 4 0-hour work week. 

2 CHAIRMAN LOCKYER: That's because Congress has 

3 talked about eliminating it, which is why, so they wanted to get 

4 rid of both protections. 

5 MS. BLACK: And I understand that. And not that 

6 it's even relevant to these hearings, but I certainly don't 

7 believe that this Commission would ever even entertain that 

8 particular thought. I know I would not. 

9 Again, I don't believe that that's relevant to 

10 this hearing, but I understand — 

11 CHAIRMAN LOCKYER: It's not at the moment. 

12 Senator Ayala. 

13 SENATOR AYALA: Yes, reference was made to the 

14 farmworkers. I picked grapes and figs in the Central Valley 

15 when I was a youngster, and we worked from sun up to sun down, 

16 piecemeal. It wasn't by the hour. So, this wouldn't affect 

17 them at all. 

18 So, I don't think that the farmworkers' 

19 conditions are involved with this type of work, because those 

20 folks work in productivity and piecemeal. The longer they work, 

21 the more they make. 

22 I'd like to think that conditions have improved 

23 since I picked figs and grapes in the Central Valley. I think 

24 we ought to limit the working hours to those folks so they can 

25 make a minimum wage at least and survive. 

26 So, the farmworkers' conditions do not enter this 

27 picture at all, unless they've changed, and I hope they have. 

28 They have nothing to do with what we're discussing here today. 


MS. BLACK: Senator Ayala, if I might add. 
Senator Brulte had asked who else is exempt from this current 
40-hour work week. 

I grew up, from the time I was 12 years old, 
working for my father, which means I was exempt from any of 
these rules. 

SENATOR AYALA: You worked for someone else, 
working for your father? That's not relevant, either. 

MS. BLACK: No, I understand, but his philosophy 
is that you got to work earlier, and you were the last one to 
leave. And it was many, many 15-hour days on the farm because 
my father had an employee in his daughter that was exempt from 
those rules. 

SENATOR AYALA: I probably worked for your 
father, too. 

CHAIRMAN LOCKYER: I had that problem, too. 

What kind of crops do you grow? How many acres? 

MS. BLACK: I farm row crops — vegetables, 
melons, garlic, lettuce, tomatoes. 

SENATOR BRULTE: You may be in trouble now. 

CHAIRMAN LOCKYER: They're going to tease me 
about vegetables now. I think it's good that we grow them here 
for export. 

MS. BLACK: I can support that as well. 

CHAIRMAN LOCKYER: And I assume just by the 
nature of at least some of these specialty crops, there are 
short harvest periods in some instances where you work a crew 
more than 8 hours? 


1 MS. BLACK: That's true. 

■ 2 CHAIRMAN LOCKYER: I think that's the reason, as 

3 I understand it. 

4 MS. BLACK: Because it's a very market -driven 

5 business. When lettuce is three dollars a carton, you really 

6 aren't in a hurry to go pick it. When it hits ten, twelve 

7 dollars a carton, you want to certainly pack as much of it as 

8 you can. 

9 CHAIRMAN LOCKYER: Let me ask, at the time the 

10 April 11th meeting occurred, I understand that Commissioner 

11 Center also recommended or made a motion to support the Knox and 

12 Solis bills that would allow for four hours a week to be, in 

13 effect, moved around so it wouldn't be subject to over-time. 

14 Now, the Commission voted two-to-three to oppose 

15 that, which seems to be a different kind of statement than the 

16 ones you've made so far, that you thought your obligation under 

17 the law, and that the record and facts justified eliminating 

18 over-time. 

19 Why were you opposed to endorsing those two 

20 measures. 

21 MS. BLACK: I can only speak for myself, 

22 Mr. Chairman. 

23 Four hours of makeup time did not adequately 

24 address the requests of the many employees that wrote letters to 

25 this Commission. They, in fact, were often looking for 

26 unplanned days off, where, ironically, I talked to many people 

27 that say — employees that said, "I'd love to come testify at 

28 your hearing, but I have to take a day off without pay to do 


that." Four hour makeup time does not address those concerns 
for those employees. 


MR. ALAM: Well, I think I have some different 
explanation, but that goes back to the labor, that when I 
contacted the labor, they kind of, you know, outcast me. Did 
not try to communicate with me, tell me their concerns. Then, 
at the last minute, when we're there for the vote, they send all 
this kind of motions, you know, through Chuck Center. 

And I, you know, I even did not have an idea that 
how it's going to affect, and I did not have time to really 
think about that. 

I had no problem giving, you know, flex time, 
four hours, two hours, as the workers demand. My only concern 
was that I was — I had no chance to read that, and I did not 
know the consequences, you know, how it will be received by 
other people. 

CHAIRMAN LOCKYER: Senator Brulte. 

SENATOR BRULTE: How often do you adopt 
resolutions to recommend to the Legislature adoption or defeat 
of bills? 

MS. BLACK: It has not traditionally been 
something that I've done in three years on the Commission, to 
officially support or oppose bills. 

The Department of Industrial Relations does that, 
but the Commission has not historically, in my term, done that. 

SENATOR BRULTE: And in this case, they didn't 
that either, because it lost. 


CHAIRMAN LOCKYER: I guess if there aren't 
further questions, we ought to take some brief testimony. So, 
if maybe the three of you could give us a little room for a 
couple of minuteS/ and a couple of chairs in front. 

We will just ask those supporters and opponents 
to be very brief and, hopefully, nonrepetitive. 

Thank you very much. 

MR. WASHINGTON: Good afternoon, Mr. Chairman 
and Members . 

In my particular case, it's hard not to be 
repetitive. I've been at this for so long, it's very difficult 
to finds something new to say. 

I'm Willie Washington with the California 
Manufacturers Association. 

Fortunately, I'm here today, though, in support 
of the two Commissioners who are here for confirmation. And I'd 
just kind of like to briefly go over some of the things and all 
that we've gone through over last 18 months. 

First of all, I'm an advocate, and that's what I 
do for a living currently, and that's exactly what I tried to do 
in persuading those who are making that decision, that we ought 
to eliminate the daily over-time requirement in California. 

I'm primarily responsible for Wage Order One, the 
manufacturing, and Four that deals with professional, technical, 
and the others. So, those are the areas in which I claim some 
amounts of expertise. 

I've talked to each Commissioner who's been 
appointed, those who were there and those who were no longer 


there, and the new ones as they came on board in an effort to 
try to persuade them to see things the way that we thought they 
would be more manufacturers in the State of California. Talked 
to each one of them. 

We invited each one of these members to 
communicate with our members, whether they were the companies, 
or whether or not they were the employer representatives here in 
Sacramento. We tried to make that happen so that we could have 
this exchange of information between the two as to why we 
thought it was important that California move into the current 
century as far as the working hours is concerned. 

I attended every meeting that they held. I 
stayed the duration of every meeting that they held. I took 
notes as best I could, and I tried to respond to every issue 
that was raised so that I could provide that information to the 
Commissioners . 

We've done such things as the safety issue. I 
have provided the information on studies that were done by my 
members who've been in business ever since the industrialized 
revolution began, and who operate in many of the 50 states who 
have their own numbers, and they can compare it to the national 
standards, to show you that in California, where we have those 
companies who are indeed already working 12-hour or longer 
shifts, or someplace in between, that we are as safe as they are 
in other states. 

And I can explain, if you would like to have some 
information after I go through this, some of the reasons why we 
would have some of these differences from the national report 


that we provided. 

We've provided studies. We provided the 
expertise on the effect of longer hours on people, people who 
worked 12 hours, 10 hours, or whatever. We've got studies. 
We've got organizations who specialize in that. We provided 
that information to the Coiranissioners. 

We provided information relative to the State of 
California as you compare it to the other states who do not have 
a daily over-time requirement. First of all, we went after 
those industrialized states that most resemble California. 
There was about 15 of those. We submitted evidence to the 
Commissioners that indicated clearly that, when you look at all 
of the other things and held them constant, that those workers 
in other states that did not have the daily over-time 
requirement earned more money than those workers in 

So, California would be in disadvantage in terms 
of their earnings because of the daily over-time rule. 

We looked at the Hammer-Smith and Trejo and 
Hammer-Mesh study. After reading through that at least five 
times, there was one major conclusion that I drew from the 
report, Mr. Chairman. First of all, for the first time, and the 
only one that I know of, you actually studied the situation that 
we are dealing with here, the daily over-time in the State of 
California and the effect that it has on employees in 

What they found is that in California, about 10 
percent of all males — this study dealt with males, so it 


specifically related to that -- 10 percent of all males in 
California would fall into the category who would be impacted by 
the daily over-time and the subsequent changes that were being 

But the report went on further to say in essence 
that of that 10 percent who's eligible, there's only one percent 
who actually would be impacted by it. That is, those who work 
more than 8 hours in a day, but less than 40 hours in a week. 
So, of this potential 8.1 million, and I won't squabble whether 
it's up or down or whatever on it, the effects are the same, 
we're talking approximately one percent. 

Mr. Chairman, I've listened to these committees 
go on for years up here, and out of a population of 8 million, 
it's very difficult for me to understand why we would make 
public policy that would affect the other 99 percent, when we 
have a potential one percent that would be impacted. It's very 
difficult for the element of change, and no one, absolutely no 
one, is harmed by a change. That would be a very, have unusual 

Mr. Chairman, I will conclude there. You had 
some questions relative to the safety and some of the other 
things. If you choose to ask the question, I'll be happy to 
stay here and answer them. Otherwise, I wanted to be as brief 
and give you the chance to hear from some of the other people. 


MS. BROYLES: Good afternoon, Mr. Chairman, 
Members. I'm Julie Broyles from the California Chamber of 


We are here in support of both of the 
Commissioners. We believe That Robyn Black, in her capacity as 
an employer representative, truly has worked very, very hard to 
be fair and hear all sides of this issue, whether it's from an 
unrepresented worker, or from a represented worker, or from an 
employer who would like to take advantage of the change in the 
over-time rules to provide the flexibility that their employees 
are asking for. 

She's had a very deep personal commitment to the 
Commission to ensure again that all sides had a fair hearing, 
that all possible concerns and benefits actually had a fair 

She has endured a lot of personal attacks that I 
personally very not seen given to any Commissioner or to a 
Legislator before, whether it's personal insults being called to 
her, or the physical brandishing of a gun. 

CHAIRMAN LOCKYER: Sometime I'll introduce you to 
those that have been involved in Smog Two. There are plenty of 

MS. BROYLES: It truly has been an eye-opening 
experience going through all of the hearings with the 
Commission. Mr. Alam, I think, gave the hardest vote there 
because he truly, in my conversations with him after the vote 
last Friday, felt that he was making a vote that did not just 
represent those with an union membership, but those employees in 
California who actually had asked for this change and were not 
able to enjoy it the way a lot of the union members have been 
able to in California. 


I know that you have a lot of other people who 
would like to speak, but we very, very strongly support the 
nomination and confirmation of both Robyn Black and Syed Alam. 

One last thing. The waiters are under Wage Order 
Number Five, and I have a copy of wage order, if you'd like it. 

MR. GABRIEL: Senator and Members of the Rules 
Committee, my name Roy Gabriel, representing the California Farm 
Bureau Federation. 

And I'm here to indicate that I've known Robyn 
Black for a number of years prior to her voluntary assignment 
before the Industrial Welfare Commission. I just want to 
indicate that she's been very active and President of the 
California Women for Agriculture, and has attempted to reach 
out, and been a consensus builder in her efforts to try to, you 
know, represent her interests to the urban constituency and to 
other Legislators. I've always felt that she's been a very fair 
individual in reaching out to try to understand both sides of an 

CHAIRMAN LOCKYER: Okay, other comment? 

MR. RANKIN: Mr. Chair, Members, Tom Rankin, 
representing the California Labor Federation. 

Before I go into the issue of the individuals 
here, I'd like to say a couple words about how the wage orders 
work, because there seems — I don't think that was clear 
necessarily from the testimony. 

Right now, the wage orders that are affected 
here, all of them allow for a 10-hour day, and some of them 
allow for a 12-hour day, but the employees have to have a vote 


before the 8-hour day is changed. So, what we're seeing here — 

CHAIRMAN LOCKYER: You mean in the current 

MR. RANKIN: Under the current orders. 

So, what's happening here is a deprivation of 
choice for employees/ because under the proposed — which we're 
in court on — new orders, the employees will have no choice. 
And what that's going to mean, not just for part-time employees, 
but for full-time employees, they can suddenly be required by 
there employer, and their employer can fire them if they don't 
go along with it, to work four 10s. 

Now, suppose an employee's worked at a place for 
10 years, is very happy with the 8-hour day, and is suddenly 
told, you've got to work four 10s, because the employer can do 
that without any disincentive of paying over-time any more. 
That employee is unable to get child care for 10 hours a day. 
That employee is going to have to make a very hard decision, 
probably going to have to quit the job, or not take care of the 
kids. That's what this means to full-time employees. 

What it means to part-time employees — and 
approximately 20 percent of the employees in this state, 
according to EDD, are part-time employees, most of them are 
women, women are disproportionately part-time workers — 
part-time workers who don't work 40 hours a week would never be 
eligible for over-time pay under this proposal of the IWC, under 
their current regulations for these five wage orders. 

In other words, that waitress who comes into work 
who needs child care at the end of the day, and her replacement 


doesn't come in at the end of her shift, can be told by her 
employer, oh, you've got to work four more hours today. And the 
employer pays no time-and-a-half for those four more hours. 

Presently, at least there's some disincentive to 
stop the employer from doing that. Under what they've done, 
there is none, so that waitress is going to be taking home less 
pay. And if she doesn't want to work those extra hours, she can 
be fired. It's the employer's prerogitive. 

The wage orders that were overturned at least 
gave employees some say in over-time work. 

Also, I need to explain, maybe, the purpose of 
over-time pay in the first place. It was to spread employment, 
in part, as well as to give employees who are forced to work 
Inconvenient hours some extra compensation for it. 

It is proper that there be less over-time in 
California, because those wages orders are working and spreading 
employment. If you look at one of those studies, you can guess 
that if there is no over-time pay, daily over-time pay, 
unemployment in this state will increase by a small percentage. 
That's not what we want in California. 

In terms of the individual candidates, Syed Alam 
is hardly a representative of organized labor. A member of his 
organization can talk about his relationship to the 
organization, but I'll just talk about what he did once he was 
on the IWC. 

We had a meeting, several labor people, with Syed 
right after he was named and talked about the problem. His 
first act of voting was to name wage boards, name labor people 


on wage boards. 

His second act in voting was to vote — 

CHAIRMAN LOCKYER: What do you mean name? 
MR. RANKIN: We were opposed to setting up wage 
boards on this issue. There was no evidence in the prior 
hearings that this was prejudicial to health and welfare of 
employees . 

CHAIRMAN LOCKYER: So, that was your first 

MR. RANKIN: First problem. 

The second problem, he voted, of course, after 
the wage boards, which were half labor and half management — 
labor on one side, management on the other, which should have 
given some indication of labor's views — he voted to go ahead 
and have more hearings. And then finally he voted to eliminate 
daily over-time. 

There's no question of his failure to represent 
the issue of workers in the State of California on this issue. 
Workers will lose probably about a billion dollars in over-time 
pay a year under this. It's hardly in their interest to 
eliminate daily overtime pay. 

Robyn Black, before I go on Robyn Black, one 
general issue that applies to both candidates. 

The whole time, part of the time, the whole time 
both of them were on there, they faced another issue, not just 
daily over-time but minimum wage. Why didn't they vote to 
increase the minimum wage? That's their duty. 

Syed Alam sat here and told you he would vote to 


increase the minimum wage. Well, he sat on the IWC when that 
was a potential issue. He didn't raise a word/ raise his hand 
about the minimum wage. 

Robyn Black didn't do anything to increase the 
minimum wage, even after an initiative was placed on the 
ballot. She should have gotten some indication of how people, 
working people felt about the need to increase the minimum 
wage . 

In terms of her desire to be fair, I'd like to 
point out to you a couple Of instances which indicate to the 
contrary. She engaged in a debate here in Sacramento before the 
local Industrial Relations Research Association with Barry Broad 
from the Teamsters Union. I think it was in the fall, probably 
September of 1996, before this matter had gone through the 
process. And which side of the debate did she take? That daily 
over-time should be eliminated. This was before wage boards had 
met, before the final hearings. She had her position down 

Second instance, on the last day of the hearings, 
the public hearings when — the last day the record was open, 
there was introduced, at the behest of the Department of 
Industrial Relations, a Hoover Institute study which was 
mentioned here. It was introduced at a time that no one, 
except someone who was there that day, off the top of their 
head, could try to refute that study, because the record was 
closed at the end of that meeting. 

Now, that doesn't strike me as exactly fair 
because it would have been very easy for the IWC to put off 


1 their vote, to hold another public hearing. 

2 CHAIRMAN LOCKYER: Did anyone ask them to do 

3 that? 

4 MR. RANKIN: They were asked to do that, and they 

5 didn't do it. 

6 Another instance, one of the instructions to the 

7 wage boards was that they should seek to look at this issue in a 

8 way that protected employees. At least they instructed the wage 

9 boards to do that, and the wage boards couldn't find a way of 

10 doing that, even though the four-hour provision was -- makeup 

11 time provision was proposed, and other things were proposed. 

12 The final vote of the IWC took away all 

13 protections for employees, including primarily the voting 

14 provisions. And it's interesting that the public member of the 

15 IWC at the meeting when that action was taken took about 10 

16 minutes to refute that Hoover Institute study and talk about how 

17 simplistic and inaccurate it was, and voted against eliminating 

18 daily over-time. That was the public member, let alone the 

19 labor member. 

20 Robyn Black also at that meeting allowed a new 

21 member of the IWC, who was appointed after Terry Arnold was 

22 withdrawn, to vote on eliminating daily over-time, after it was 

23 pointed out to her that the Government Code requires a 15-day 

24 period were a vacancy is left vacant until an appointment is 

25 made. There was probably 5 days in between the withdrawal of 

26 Terry Arnold and the appointment of Cynthia Neff . 

27 CHAIRMAN LOCKYER: Does that mean that those 

28 actions were illegal? 


MR. RANKIN: Well, that's an interesting question 
that we are looking into. 

But in general, we believe the actions of the IWC 
were illegal, and we've told them that many times, as have a 
number of Legislators. We believe they took into their hands 
authority that belongs in the Legislature and does not belong to 
the IWC. Whereas, they might be able to have over-time 
provisions and talk about them, it is not within their purview 
to eliminate daily over-time altogether. That's what they voted 
to do in these five wage orders, and we strongly oppose their 

CHAIRMAN LOCKYER: Please be nonrepetitive, if 
you think that's possible. 

MR. MAHAN: I will be brief and nonrepetitive. 
I didn't move as fast as Tom did. 

I'm a supporter of the confirmation 
recommendation of the two Commissioners that are before you. My 
name is Paul Mahan. I represent the California Trucking 
Association, and we strongly urge your support or recommendation 
of confirmation of both of the Commissioners that have appeared 
before this Committee. 

CHAIRMAN LOCKYER: Which order affects trucking? 

MR. MAHAN: Nine. Nine dash ninety. 

CHAIRMAN LOCKYER: Can you estimate for us how 
many trucking employees would be affected in California? 

MR. MAHAN: I'm not sure. We've got over 300,000 
employees, but most of the drivers are already exempt because 
their hours of service and qualifications are already controlled 


by the Department of Transportation or the California Highway 

CHAIRMAN LOCKYER: What are the rules basically? 
How long can they drive at a stretch without a break? 

MR. MAHAN: I think it's about 10 hours a day, 60 
hours a week/ but then we've got other employees, you know, in 
the office, the clericals, the dispatchers, the warehouse, 
mechanics, and all the others. 

CHAIRMAN LOCKYER: That aren't subject to that? 

MR. MAHAN: That are not subject to that. 


MS. SUTHERLAND: I will be brief. I am Shannon 
Sutherland with the California Nurses Association. 

We echo the sentiments Mr. Rankin represented. 
We too were in attendance at all of the hearings, and the 
activities that he just discussed were as they appeared to be. 

The primary issue for nurses was the fact that 
with the restructuring, nurses are more and more on attack in 
the hospitals, and the 8-hour day did provide an effective 
barrier to staffing abuses. And that was one of the main things 
that we highlighted, was the fear that nurses would not be 
replaced and would be required to work many hours after their 
designated shift. I don't need to detail the implications that 
has on safe patient care, as well as the health and safety of 
the workers. 

In addition, the child care issue was very real 
to us, having people stay long after their shift is over and 
could not make alternative arrangements. 


So again, we are strongly opposed to the 
reappointment of both Syed Alam and Robyn Black. 


MR. PELOTE: Mr. Chairman and Members, my name is 
Willie Pelote, representing the American Federation of State, 
County and Municipal Employees, the largest public employee 
union in this nation with 1.4 million members. I represent the 
United Nurses of California in Southern California and all other 
kinds of hospitals. 

And they want — we want to make it clear today 
that we are strongly opposed to the IWC Commissioners being 
confirmed. And we want to just echo the comments of Tom Rankin 
for the California Federation of Labor as well. 

Thank you. 

MR. READ: Mr. Chairman and Members, Aaron Read, 
representing the Professional Engineers in California 
Government, the organization to which Mr. Alam belongs 

I would like to point out that his membership was 
only renewed, we believe, after he made application for this 
particular position. Throughout the last eight years in which 
he's been employed by the State of California, he's been a 
member off and on throughout that period, but was not a member, 
as near as we can tell, when he took out the papers from the 
Governor's Office. Which leads one to wonder whether it was a 
legal appointment at the time. 

We certainly also question whether it's a legal 
appointment even if he was a member because under Labor Code 


1 Section 70. t it says, and I quote, "The Industrial Welfare 

2 Commissior. all be composed of two representatives of organized 

3 labor who cje members of recognized labor organizations." He 

4 fits the latter requirement of being a member, but not of being 

5 a representative of our organization. 

6 I've been the advocate for PEG for 19 years, and 

7 I've never had an occasion to see or meet or hear his name. And 

8 it is our understanding that in the term representative of that 

9 organization, they really should be a person who has been in 

10 some role — a chapter president, a member of the board of 

11 directors, on the legislative committee — some role where they 

12 have some knowledge. 

13 So, in a deposition which we took, which I've 

14 asked that excerpts of it be passed out to the Committee today, 

15 there were numerous questions asked by our counsel of him 

16 recently. A number of those questions included his familiarity 

17 with labor issues and with our organization. And basically on 

18 all counts, he was unable to answer the questions. 

19 He doesn't know who our president is PEG. He 

20 doesn't know what the term AFL-CIO means. Or Mr. Pelote 

21 mentioned AFSCME being the largest organization in the country, 

22 does not know what those letters mean, or the letters SEIU, or 

23 any of the letters that some of us in the labor area know on a 

24 regular basis. So, one would seriously — 

25 SENATOR AYALA: Why is that necessary, that they 

26 have all this background? If they represent if working folks, 

27 as they should, why do they have to be members of a union? 

28 MR. READ: The law that I just read to you. 


Senator Ayala, requires that this position be that of organized 

It was done in fairness. It was done for 
balance. The board has five members. 

SENATOR AYALA: I understand that. 

MR. READ: And the two from management, if you 
will, two from labor. 

SENATOR AYALA: I could never participate because 
I'm not a member of the union? 

MR. READ: According to this law, that is 

CHAIRMAN LOCKYER: You could be a public member, 
but not a union representative, is his point. 

MR. READ: But I consider you an honorary member 
of all of my groups. 

[Laughter. ] 

CHAIRMAN LOCKYER: As soon as you start paying 
dues, then you can even be — 

SENATOR AYALA: I can vote. 

CHAIRMAN LOCKYER: Yes, you can vote. 

Have you concluded? 

MR. READ: Yes, sir. I'll be mercifully short. 

CHAIRMAN LOCKYER: Thank you very much. 

Other comments? 

MR. ALLEN: I'm Ward Allen with the Teamsters 228 
and 952 today. 

I would be honored to have Senator Ayala 
represent me as a labor representative if I ever lost my job. 



1 Boy, you can bet that. 

2 And there's 322,000 truck drivers in California. 

3 The 10 hours actually pertains to hours of service, not 

4 compensatory hours. Over-time after eight would apply to them. 

5 But the 10 hours is actually hours of service, the hours they 

6 can legally drive. 

7 We would echo everything that Tom Rankin said in 

8 his fine presentation, and we are opposed to the two nominees. 

9 Thank you, Mr. Chairman 

10 CHAIRMAN LOCKYER: Thank you. 

11 Anyone I neglected to hear from? Are there other 

12 questions from Members? Questions of the nominees or anyone 

13 else? 

14 SENATOR HUGHES: I don't want to drag this out 

15 too long, but — 

16 CHAIRMAN LOCKYER: Do you want to hear from one 

17 of the nominees? 


19 Commissioner Black has a very interesting 

20 background, and I'm interested in the fact that your father is 

21 in agriculture; right? 

22 MS. BLACK: I'm fourth generation with my father, 

23 my grandfather, and my brother. 

24 SENATOR HUGHES: That's wonderful, because you 

25 feed the nation, and they're all hungry. 

26 I want to know if you produce a lot of broccoli. 

27 CHAIRMAN LOCKYER: George Bush won't like that. 

28 SENATOR HUGHES: I want you to know, I like 


broccoli, even though Bush and Mr. Lockyer don't like broccoli. 
I like vegetables. 

MS. BLACK: Senator, I'm so happy to hear that 
you like broccoli. I truly am. It not only makes me happy, but 
Dad and my brother will all be happy when I go home. 

CHAIRMAN LOCKYER: I have to interrupt to tell 
you that in my top ten list, if politics were a garden, broccoli 
is Diane Feinstein. Meaning, except I'd love to buy a few, 
vigorously marketed, accepted by most as inevitable. 

[Laughter. ] 

CHAIRMAN LOCKYER: I'll tell you what Wilson, 
Brown and others are, if you want to get me started here. 

Go ahead. 

MS. BLACK: Do we potentially have a marketing 
opportunity here? That's what I'm hearing. 

SENATOR HUGHES: My point is, I think it's 
wonderful that you raise fruits and vegetables because many of 
my constituents don't have an opportunity to eat the steaks that 
Mr. Lockyer eats, or some other Members in this room. 


SENATOR HUGHES: Or the pizza, the junk foods 
that he likes. And I think that vegetables certainly nourish 
them. I'm very proud that our state is a big agricultural 

Now, I was getting to my point. Do you feel, and 
you mentioned the farmworkers early on, do you feel that people 
have a right to work over-time and be paid over-time wages? 
Because you gave the Farmworkers Union as an example of people 


1 who don't work 8-hour days because of the harvesting. 

2 And don't you feel that the nature of the work 

3 would better dictate to you a decision as to whether they were 

4 working long hours or not? The nature of the very labor itself? 

5 MS. BLACK: Are you talking about because of the 

6 difficulty, and that it's a very strenuous profession? 

7 SENATOR HUGHES: That's correct. 

8 MS. BLACK: Are you asking if I would support a 

9 repeal to 8 hours for farmworkers? Is that what you're asking? 

10 SENATOR HUGHES: Suppose the farmworkers came 

11 here, and they said they only wanted to work 8 hours, and they 

12 wanted over-time. Would you vote for them to get that? 

13 MS. BLACK: Senator, I want to answer very 

14 honestly for you. 

15 The business side of me is going to probably 

16 recoil at the idea of another increase in the cost of doing 

17 business in California. 

18 However, as with any issue — 

19 SENATOR HUGHES: But you gave that as an example. 

20 MS. BLACK: I was asked a question pertaining to 

21 that particular industry, and I tried to answer that question. 

22 In answering, and again, trying to further answer 

23 your question again, though I may have great reservation, and I 

24 probably would bring a bias somewhat to the table in terms of 

25 changing that law, I would probably even have to recuse myself 

26 as a Commissioner because it would — 

27 SENATOR HUGHES: It would be a conflict of 

28 interest, so that you would not vote -- 


MS. BLACK: I would probably -- 

SENATOR HUGHES: — on agricultural issues, is 
what you're telling me? 

MS. BLACK: No, not necessarily against all 
agricultural issues, because I have looked at agricultural 
issues in the past. 

But for myself, because that would have a direct 
financial impact on my business, I don't believe that I could 
fairly address that issue as an appointed official with the 
authority to make that particular change in the law. 

I would have to admit that that would have 
serious financial implications on me, and I would conflict out 
of that one. 

That doesn't say that I can't look at other 
issues that affect agriculture, because in fact, two years ago 
we had an issue pertaining to the mandatory day off in the nut 
industry. And it was an issue that I worked on. I ultimately 
voted on, and I think I acted on as Chairman. 

But that issue, I think, I would really struggle 
with. And I don't say that I support or oppose it. I'm saying 
that I'd probably have to recuse myself. 

SENATOR HUGHES: So that you probably would not 
vote on the agricultural issues; yes or no? 

MS. BLACK: On that specific one, because of the 
financial implications involved — 

SENATOR HUGHES: Anything that affects money. 
But the financial implications you're talking 
about of the industry, but I'm talking about the financial 


rewards or deficits of the laborers. 

That's something, when you say the financial 
issues, it goes both ways. 

MS. BLACK: Oh, I understand. 

SENATOR HUGHES: Not just that the industry makes 
the money, but the worker makes the money. 

MS. BLACK: And I completely understand that, 
Senator Hughes. 

I think some people have mentioned to you that in 
my past, in many of the capacities that I have served in, I have 
tried very hard to bring issues that affect farmworkers to the 
table. I grew up with many of the farmworkers that work for my 
particular family farming operation. I've worked with the 
second and third generations who are there, working on our 
family operation. 

I would dare offer this body the fact, or submit 
to you that I care as much about the health and welfare of those 
employees as probably anybody else in this room, because our 
relationship is intertwined. We're one and the same. We are a 

There's many issues that I've worked on 
pertaining to agricultural workers, pertaining to how do we 
protect them in the environment of farm labor contractors; how 
do we make sure that all the enforcement aspects are not only 
adhered to, but how can we do a better job of education? Do we 
need to be doing more? 

I think you can talk to a great number of members 
in this Legislature on both the Senate and the Assembly that I 


have talked to advancing pro- farmworker legislation that I think 
is not always to the benefit of the farmer, but to the benefit 
of the farmworker. I think I'm a very fair individual on those 
issues . 

But you're talking about an issue, or you're 
asking about an issue that would affect the bottom line of my 
business. And so, for that particular reason, I would just 
recuse myself. Senator, from the potential. 

That doesn't say that I don't think I could be 
fair, but even if I were fair, the perception would probably be 
that I were not. I just wouldn't. I would conflict out. 

SENATOR HUGHES: Let me tell you, I think that 
anyone who has worked for a relative, or has a relative that 
owns a business would have, perhaps, some of the biases that you 
have because it's really difficult. How do you tell your 
parents you're not working? And your parents say that you work 
for six hours a day, and they own the business. Are you going 
to tell them, no, you won't work but four hours a day because 
that's all that you want to work? 

So, let me go on. 

MS. BLACK: My father wouldn't listen to me in 
that circumstance. 

[Laughter. ] 

SENATOR HUGHES: I'm sure he wouldn't. 

Now, let's talk about voluntary over-time. Do 
you believe that people should have the right to try to make 
more money for their families, especially if there's only one 
person working in the whole household, and it's a fairly 


substantial sized family, and the cost of living in the locality 
that they're in is very high, rents and property are very high? 
Do you think that people should have an opportunity to 
legitimately earn more money to meet their family needs? 

MS. BLACK: I would agree with you. Senator. I 
do not suggest that we eliminate over-time pay in California. 

SENATOR HUGHES: That's not my question. 

I said, do you think that people should have an 
opportunity to work voluntarily over-time, and their employer 
would give them commensurate pay for work performed? 

MS. BLACK: Are you talking about comp. time 
issue, or are you talking about would I — 


MS. BLACK: I understand that. 

I support voluntary over-time. I do not support, 
I believe at this time, although this has not been an issue 
before this Commission, I have concerns pertaining to mandatory 
over-time. That is not an issue that's been before the 

Senator, if I don't understand your question 
directly, I apologize. 

Yes, I support over-time pay. I'm not suggesting 
that we eliminate it. I'm suggesting that we allow flexability 
within the work week to accommodate personal life and work life, 
and still have over-time in excess of 40 hours. 

SENATOR HUGHES: Well, that wasn't my question. 

On April the 11th at a meeting of the Commission, 
there was a vote regarding over-time, that over-time be 


voluntary on the part of the employee. And that motion died 
because there was no second. 

You voted against it. Is that not correct? 

MS. BLACK: It died for lack of second. There 
was never a vote. 

SENATOR HUGHES: Yes, but it would never be a 
vote unless it got a second. 

And why didn't you give it a second if you 
believe people have a right to work over-time? 

MS. BLACK: I don't suggest that I believe people 
have a right to work over-time. I think that the employer ought 
to have the ability to contain their costs. They incur the 50 
percent penalty in labor costs. 

And I apologize. I have difficulty understanding 
exactly where you were going with that particular question 

SENATOR HUGHES: My question was, why didn't you 
vote to second the motion if you believe people should have an 
opportunity to volunteer to work over-time? 

MS. BLACK: But I think that's almost, forgive 
me. Senator, but it's over simplifying the issue in many ways. 

To suggest do I support their ability to 
voluntarily work over-time, yes. 

To suggest that an employee can, if they choose, 
work over-time, I think that's an issue between the employer and 
the employee. The employer's one who's going to incur the 50 
percent penalty of the over-time cost. I don't believe it's 
purely at the discretion of the employee. 

In addition to that, if I may. Senator, during 


the process of the Industrial Welfare Commission and our rules 
and procedure, unlike the Legislature, unlike yourselves, who 
can accept amendment, notice of file, and accept a change, those 
kinds of changes that are offered at that particular end of the 
process — or, maybe end of the process is not the correct 
word — but the substantive amendments that were being offered 
in that particular day would require possibly even going back to 
the investigatory hearings, charging them back to wage boards, 
putting them out to new hearings. It's not is a simple 
procedure for us . 

So, for many reasons that I believe the motion 
died for lack of a second — 

SENATOR HUGHES: But I'm saying, if you believed 
in the opportunity for a person to work over-time, you were 
derelict in your duty by not volunteering to second the motion, 
so therefore, the motion never had an opportunity to make a 
change in the law. 

Let me go on to another measure. I don't want to 
stay on that too long, because sometimes silence gives consent, 
and you gave consent for it to die. 

MS. BLACK: For many reasons. Senator. 


The other problem that I had there was another 
motion on that date that employers be responsible for child care 
expenses incurred by the employee as a result of involuntary 
over-time, involuntary over-time. 

I bring this up because you've, on several 
occasions, mentioned your son. And you are certainly 


responsible and proud of the fact that you have a son. 

And this motion also died. Why didn't you say 
anything in this instance? 

MS. BLACK: Senator Hughes, I did say quite a lot 
specific to that particular issue. I suggested that the issue 
certainly was a worthy issue. It was an issue that I believe 
that I supported/ although That was the first time that I had 
seen it, that particular morning. I suggested that this is an 
issue that the IWC ought to take out to hearing. I supported it 
in its intent/ but I had not had the input — 

SENATOR HUGHES: But you did not give the motion 
a second? 

MS. BLACK: Not to adopt it without investigating 
it/ Senator. 

SENATOR HUGHES: How long do you have to 
investigate the fact that if you were a single parent/ and if 
you were not economically well off/ and you had no one to take 
care of your child, no trusted relative or neighbor/ that the 
employer should provide for taking care of this child? 

I'm just talking plain sense. What is there to 
think about when your most precious possession is not going to 
be cared for, and you have to involuntarily work over-time? 
It's not a decision that you made. It's the decision that your 
employer made. 

Now tell me, what is there to think about on 

MS. BLACK: Senator, there's probably many things 
that one ought to consider under those particular circumstances. 


I have been a single working parent. I worked 
under Wage Order Four. I understand the difficulties and the 
limits on day care. 

At every step throughout this process, that was 
of great concern to me. 

SENATOR HUGHES: But you chose not to move the 
motion because you wanted them to bring it up several times 
until other people were on your side, and you had someone else 
to vote with you on it? 

MS. BLACK: No, Senator. 

As I tried to explain, the rules and procedures 
of the Industrial Welfare Commission, I could not truly accept 
that amendment without taking it out to further public hearing. 
It was a substantive amendment to the proposal. 

We are not like the Legislature, Senator. When 
there is a substantive change to a proposal that has been held 
out to public hearing, counsel has advised us that we cannot 
accept that kind of amendment at that particular point in the 

SENATOR HUGHES: Is this the counsel that's 
sitting next to you? 

MS. BLACK: No, it is not. This is private 
counsel who represents Commissioner Alam. He's not the counsel 
at the Industrial Welfare Commission. 

But again. Senator, I submit to you, and it's in 
the public record, that when this amendment was offered on April 
11th, I in fact said, I believe that that is something I would 
support, but it cannot be accepted under the rules and the 


procedures today, voted on and approved without public 
hearings. However, I support it. I encouraged it to go out to 
public hearing. 

SENATOR HUGHES: Did you say that at the meeting? 

MS. BLACK: In the public record. Senator. 

SENATOR HUGHES: In the public record? 

MS. BLACK: Absolutely. 

SENATOR HUGHES: Do you plan on bringing it up 
again at your next meeting? 

MS. BLACK: I don't believe this body is going to 
allow me the opportunity. 

SENATOR BRULTE: Are we going to reject you 
before the next public meeting? When is the next public meeting? 

MS. BLACK: I had scheduled, at the conclusion of 
that hearing, a meeting for, I believe. May 18. 

Senator, I'm sorry, a follow-up. 

Immediately after I had set that particular date 
is then the gentleman entered or approached the Commission with 
the gun and attempted to fire his weapon, a loaded .38. 

At that time, staff and the members of the 
Commission chose not to schedule another public hearing because 
we had no idea what this individual intended as part of a group. 

My staff is still very upset and very shook up 
over that incident. I would suggest to you that many of the 
members of the Commission as well do not feel comfortable yet at 
this time, given all the attention. 

Forgive me, indulge me for just a minute. But 
the fact that there has been a great deal emotion stirred around 


this particular issue, it's amazing to me how many times people 
say, "What are you doing? Why are going to eliminate 
over-time . " 

Well, we're not suggesting that you eliminate 
over-time. We're just addressing the way that over-time is 

But what has been portrayed to mass numbers of 
the population is that this Commission is eliminating over-time. 
Because people have been led to believe that, this particular 
Commission, I don't believe, feels very comfortable yet in 
scheduling another hearing. 

So, I can't tell you. I would assume soon, but as 
I said, I don't believe this body's probably going to give me 
the chance to set that date. 

CHAIRMAN LOCKYER: I note most of the public 
commentary's been made by the Governor. So, there certainly has 
been the most visible Californian who regularly in the media 
explaining his view, which you've adopted, which is eliminating 
8-hour day over-time. 

So, that may be confusing, but the one person who 
gets more press than any other single Californian, with the 
possible exception of criminal defendants on occasion, which he 
is certainly not one, has had plenty of opportunity to explain 
the issue, I think, more so than those on the other side of the 

Senator Hughes. 

SENATOR HUGHES: I have several more questions, 
not only for you, but for the other nominee also, but since we 


have a long agenda, I just don't feel that I need to go through 
the stuff at this point. 

MR. ALAM: Excuse me, Mr. Chairman. 

Can I answer one of the witnesses who came here? 

CHAIRMAN LOCKYER: You can respond to anything 
that was said before, yes, you may. 

Senator, you're entitled to ask. 

SENATOR HUGHES: Could you answer the two 
questions that I just asked Commissioner Black? Why did you not 
second the motion, and how do you feel about those items? 

CHAIRMAN LOCKYER: Voluntary and child care. 

MR. ALAM: As I told before, you know, that the 
motion was put at the last minute, and I was not aware of that. 

SENATOR HUGHES: So, someone advised you, you 
don't vote? 

MR. ALAM: Nobody advised me. Senator. Excuse 

SENATOR HUGHES: She said that she was advised by 
counsel that you do not vote on anything that was submitted and 
the last minute. 

Is that the feeling that you shared? 

MR. ALAM: No, no. Nobody advised me of doing 
anything. I just wanted to see because, for a minute, and then, 
you know, we didn't know what to do about this. We were talking 
about those motions. 

And then, you know, personally I didn't feel, you 
know, that prior to my consideration and, you know, review of 
the whole subject, what this motion was about. 


SENATOR HUGHES: I'm glad you said that, because 
then evidently this counsel that you had advises Commissioner 
Black and does not advise you. 

That seems really confusing to me . I don't 
understand why they would be prejudicious and advise one 
Commissioner about a procedure and not advise the other 
Commissioner, because the counsel is suppose to counsel all of 
you equally to allow you to make the same decision. 

Let him answer, please, ma'am. 

MR. ALAM: The counsel sits by Chairperson Robyn 
Black. I have no access to — 

SENATOR HUGHES: So, they talk to her and not to 

MR. ALAM: Yeah, he didn't talk to me. 

SENATOR HUGHES: That is sexual discrimination. 
[Laughter. ] 

MR. ALAM: I would think so. 

SENATOR HUGHES: That really bothers me. 

MS. BLACK: Senator, may I address? If you don't 
mind, may I address that. 

SENATOR HUGHES: No, I don't want to harp on that 
one issue, because that was not the nature of my question. I 
want to give him a chance to answer, too. 

MS. BLACK: I just wanted to respond — 

SENATOR HUGHES: No, because I want to get back 
to him. Thank you. 

The other issue is about the child care. How do 
you feel about the child care issue? Are you a parent. 


MR. ALAM: Yes, I have -- I have three kids: two 
little girls and a boy. 

SENATOR HUGHES: All right, so you have even more 
vested than one child. 

How do you feel about that? 

MR. ALAM: I am very sympathetic. I feel really 
bad that, you know, the working women who have — who are single 
parents and, you know, have to leave their kids to the child 

But as I said, you know, I don't know how many 
cases are there. When we are dealing with the masses, I need to 
see the number of how many people will be affected. There were 
no statistics produced on this kind of data or anything supporting 

I know they are nurses, but how many of them are 
there and working mothers, and how many of them? I mean, we 
cannot generalize just because of some typical or particular 
case and just try to be swayed by the emotions. 

You know, I know this is a very delicate and 
very sensitive issue. 

SENATOR HUGHES: But if it were you, and you were 
a single parent — you have what, five children. 

MR. ALAM: Three. 

SENATOR HUGHES: Three children. 

Okay, and you had these three children, and the 
child care that you had was not available at the time that you 
had to Work involuntary over-time. You might have found other 
ways of their being cared for, like relatives, or friends. 

But suppose you were brand-new to this job 


situation, brand-new to this town that you were working in, 
Sacramento, what would you do? 

MR. ALAM: I understand your concern. Senator. 
It's really a very complex situation. 

I have not found myself in that situation, but — 

SENATOR HUGHES: You're lucky. 

MR. ALAM: But, I mean, I really have — I don't 
know how — if it's involuntarily, yes, it really is a burden on 
the employee to work over-time without their consent, then her 
kids, you know, they cannot find a shelter after 5:00 o'clock. 

These could be cases, and I really have a lot of 
sympathy with them, but I don't know, you know, how to remedy 

SENATOR HUGHES: Both of you seem to be against 
the over-time issue to begin with, and there are two bills, and 
I think Commissioner Black talked several times about 
Assemblymember Knox. 

I haven't heard her say anything about the Solis 
legislation, but both of you know what those pieces of 
legislation do. 

How do you feel about them? And do they have 
merit, because they actually give some other alternative, and 
that's giving another time to take, maybe, the four hours off a 
week, and being made up some other time during the week. 

And why isn't that a feasible idea? And how do 
you feel? 

I'll ask you, and then I'll her. 

MR. ALAM: Well, I personally think that the 


Legislature is the body which makes law, and if -- anything 
which is passed by the Legislature is very acceptable to me, and 
I think that's the right thing to do. 

SENATOR HUGHES: Anything that we pass? You like 
everything that we do up here? Something is really wrong with 

MR. ALAM: Well, I mean, this is a body, I mean, 
the State Assembly and Senate, they have all the authority to 
pass law for the majority, and I'm sure, you know, the majority 
does the right thing when they pass this law. And I have no 
problem whatsoever with the — 

SENATOR HUGHES: Majority rules? That's really 
bad because sometimes the majority understands they make a 
mistake, so that's why they come back the next year and try to 
clean up the mistake that they made to begin with. 

MR. ALAM: Well, I hope they don't give it to IWC 
back, you know. They can agree to something, and then they'll 
be another problem. 

I agree with the, you know, Wally Knox AB 15, I 
think. And if it passes, I'm very happy. I have no problem 
with any objection. 

SENATOR HUGHES: If it passes, but your vote in 
that committee meeting on the 11th, you feel, would have been 
endorsement of his bill, and is that why you didn't vote in that 
instance on that motion as an alternative? 

MR. ALAM: I don't know if you're talking about 
the flexible schedule. It ought to be as flexible — 

SENATOR HUGHES: Yes, I'm talking about the — 


MR. ALAM: If you provide flexibility, you know, 
and that's what I think the Californians are looking for, more 
flex time. 

SENATOR HUGHES: Why didn't you vote on that 
measure? Why didn't you second that measure? If you believed 
that measure had credibility, why didn't you second the measure? 

•\ MR. 7VLAM: Well, as I said, you know, this 
motion, I don't know how it was written. 

SENATOR HUGHES: You don't know how it was 
written? It was written so you could read it. Did you read it? 
Did you understand it? 

MR. ALAM: Well, the language, you know, sometime 
is not? 

SENATOR HUGHES: It was legalese? 

MR. ALAM: Yes. As I said, I need time. At the 
eleventh hour to pass a motion, I just cannot go ahead and 
second it. I'm not even being taken into, you know, I mean, 
courtesy to tell me before that that's what we're going to do, 
and that we need your support. 

I mean, that, I had problem with the labor, they 
never talked to me. Then, whenever I tried to reach them, here 
was a guy sitting from PEG who was saying I don't know the name 
of the president, but I wrote a letter to his president. He had 
not even the courtesy to answer me. He says he has never seen 
me, while I had been in their meetings all over. I'm a member 
of the PEG since 1989, seven or eight years. 

I was invited, you know, to the Civil Four 
Section Branch, and I act with those people. And now they are 



So, what I'm trying to say here, you know, that 
if they talk to me, if they communicate to me, I will be very, 
you know -- 

SENATOR HUGHES: If they speak to you in plain 
English. I don't blame you. I like plain English, too. I 
don't know like the legalese. I* 

But you did fully understand the intent, and you 
still did not see fit to second that motion, yes or no? 

MR. ALAM: Well, I really, at this point I would 
say I needed to see that thing work out before — 

SENATOR HUGHES: No was the answer. Thank you. 

Now, Commissioner Black, on the same issue. 

MS. BLACK: Are you asking me in terms of the 
Knox and Solis bills, is that the question, or are we going to 
talk about child care again? 

SENATOR HUGHES: No. Do you resent talking about 
child care? 

MS. BLACK: Absolutely not. 

SENATOR HUGHES: I don't know why you brought 
that up. I left that a long time ago. I don't want to go back 
to it. We have too much to do today. 

MS. BLACK: I was simply trying to answer the 
question I thought that you might want me to answer. 

SENATOR HUGHES: I don't want to go back. I want 
to go forward. 

I don't want to harass you. And so, if I 
continue to ask the same things, and have you continue to try to 


plead your case, I think that's harassment. So that's why I 
moved on to another topic. 

MS. BLACK: We're moving on to the Knox and Sol is 
bills; correct? 


MS. BLACK: Thank you. 

I have been engaged in conversations with 
Assemblyman Knox all a long. He has been very involved in this 
process, and much to his credit. I have a great deal of respect 
for Mr. Knox and what it is he believes in and what he fights 

We don't always agree on everything, but I 
continue to offer to try to work with him, not only on this 
particular two bills, but on the fact that there is so much that 
we need to do in terms of child care in this state, so much. 
And that's a priority with him. It's priority with me. 
Unfortunately, that wasn't my jurisdiction. 

SENATOR HUGHES: I'm glad to hear that, thank 

MS. BLACK: But I will continue. I have told 
Assemblyman Knox that even when I'm know longer a member of this 
Commission, I will do everything I can to work with him on the 
language of AB 15. 

I have not had opportunity to work as much with 
Senator Soils, but I did stop by and speak with Pat Henning last 
week, made the same offer to him. 

There's specific issues in the Soils and the Knox 
bills that I have concerns with. One of the issues I raised 


with Mr. Knox is the four-hour makeup time does not address what 
happens to employees when they need to take an entire eight 
hours off, if the 8-hour day is to be put into statute in AB 

What happens to the employees who continue to 
have a day that comes up? Are they still in fact then going to 
have to miss four hours of work without pay? That's one issue 
AB 15 that I still have concerns about, the not withstanding 
language in the legislation. 

SENATOR HUGHES: This is not a hearing on those 
two measures. 

My question was merely about, and I'm glad to 
hear that you're working with the author, and you're trying to 
understand it. So, thank you. I have that on the record, thank 
you very much. 

SENATOR LEWIS: Ms. Black, at the beginning of 
your testimony, you talked about how tough, personally, how 
tough this issue is for you. You mentioned several of the things 
that had taken place. 

One that you mentioned was that your phone number 
was published, your home phone number was published, which 
resulted in a fair amount of anguish for your family and your 12 
year old son. 

Was this just the result of over zealous 
individuals, or was there any bona fide organization that 
actually published your phone number? 

MS. BLACK: I'm sorry that I did not bring that 
document today, but I actually have the document that published 


my phone number as well as Commissioner Arnold's and 
Commissioner Alam's. 

Unfortunately, the phone number that was 
published on my behalf was my home phone number. And as I 
stated, it is the number that sits next to my computer, and my 
12 year old son had to listen to many of those phone calls. 

I believe it was sent out actually by the 
AFL-CIO. It may have been picked up as well by other unions, I 

SENATOR LEWIS: Have you received an apology for 
that? Was that an intentional act, to publish your home phone 
number, or did they accidentally mix up what they thought was 
your home number and a work number? 

MS. BLACK: That could have been, Senator. I'm 
not going to accuse of the intent or allege that anything 

CHAIRMAN LOCKYER: Is it listed? Is your home 
number listed? 

MS. BLACK: Yes, it is. And actually, 
Mr. Chairman, I have received phone calls on — I have two phone 
numbers at home. Both phones have — it's in the phone book. 
If someone is determined to also find my phone number, then it 
is certainly accessible to them. 

CHAIRMAN LOCKYER: I understand. Well, as 
someone whose home numbers are also listed, I understand how you 
get the junk calls on those lines. 

MS. BLACK: But one was certainly published and 
put out with the intent to call. 


SENATOR LEWIS: And given the environment and the 
hostility, and everything, they went ahead and published your 
home phone number, presumably wanting people to call you at 
home . 

That strikes me as an incredibly terrible thing 
to do. 

But I just wanted to you, was there anything else 
that you wanted to put on the record with regard to the legal 
counseling issue, or child care, or anything like that? 

MS. BLACK: Thank you. I'll try to be very 

There are a few things that I would again like to 
offer to Senator Hughes. 

I feel very strongly about the child care issue. 
I strongly advocate that the IWC put out to hearing the proposal 
of the amendment that was offered by Commissioner Center. I 
think it's worthy of pursuit, worthy of investigating, and 
potentially adopting on behalf of the Commission. I encourage 

In my role as Chair, I do speak to legal counsel 
on a regular basis. The role of Chair has been more time 
consuming than I could even begin to describe to you, given all 
of the events the Commission has had to undertake with five 
proposals, the number of public hearings. 

Had anyone told me a year or two ago the amount 
of time that it would take as Chair in a volunteer position, I 
wouldn't have done this. I mean, I'm still amazed at the amount 
of time this has taken to try to do this right. 



I had to make sure that legal issues were 
addressed. We had lawsuits filed even the day before the 
hearing where I had to represent the Commission. I had to speak 
to legal counsel, independent counsel. It's taken a tremendous 
amount of time. 

I had intentionally not talked to other 
Commissioners because of the state Open Meeting Act about 
certain issues, or inform them, or how they're going to vote. 
That's not been something that I've discussed. 

I have just tried to address the matters as 
raised to me on a daily basis by staff, by our legal counsel. 

So, I think there's good reason that there are 
some things that I know because I'm involved in this every day 
and have been for months. 

One of the things I'd like to bring up, 
Mr. Rankin had mentioned the fact that I spoke at the — an 
employers' group. It was IRAC, I believe, was the group that I 
spoke to, and that was in October of 1996. 

When I was asked to speak to that group — I 
speak to a lot of groups about this issue — one of reasons that 
I spoke there, and one of the reasons I engaged in a debate with 
Mr. Barry Broad was because I thought I could learn something. 
I, as I said, continued to ask throughout 18 months for labor to 
sits down, or for those who oppose the plan to sit down and talk 
with me about it. 

It's unfortunate that had they done that, and 
potentially suggested some of these amendments earlier in the 
process, we may have able to work on those and incorporate them 


into the final action. I can't incorporate them if I don't have 
someone sit down and propose them and talk to me about them, and 
explain what it is they'd like to accomplish so that we could 
have a mutually beneficial agreement at the end. That's 
unfortunate. I wish that had, in fact, happened. 

But it is why I was happy to work with Mr. Broad 
because I really thought I would learn something. 

I went to the hearing on AB 15 because I thought 
I would learn something that would be of value to me as I worked 
to make a decision on this particular issue. 

And lastly — 

SENATOR HUGHES: Did you learn anything? You 
said that's why you went to the hearing. Did you not learn 

MS. BLACK: Senator, with all due honesty, I was 
very frustrated because it was much of the same of what I've 
experienced without. 

And I think Assemblyman Knox was equally 
frustrated, if I may be so bold as to speak for him. That there 
seems to be polarization of this issue. And it seems like 
everybody agrees that we wants flexibility, but where we can't 
agree is how Do we implement flexibility within the law. 

It is where I also had the opportunity to speak 
to Mr. Knox about the issue of primarily. It was brought up 
that I debated Mr. Broad, hopefully to learn something, but at 
that time I was also familiar with the issue of primarily. 

And to suggest that I was not moveable on any of 
these issues is, in fact, incorrect because, yes, while I did 


ultimately support the change to the 40-hour work week, I moved 
against my own proposal on the issue of primarily, which was 
also at issue at that particular time. 

So, because I enter into a discussion about the 
issue does not mean that I'm not capable of learning and 
changing my mind. Again, I offer the issue of primarily as 
evidence to that fact. 

Mr. Rankin also spoke about the issue that we 
have under current law in some wage orders, the ability to 
institute a 12-hour day, or, in some cases — excuse me, a 
10-hour day, and in some cases the 12-hour day. 

One of the things — and I wish I would have 
brought you some of the letters — both in the written testimony 
and the oral testimony throughout the public hearings, one of 
the problems that was repeatedly submitted to this particular 
Commission is that when you asked a defined work group, "Do you 
wants alternative scheduling in the course of your work week, " 
they would all, by and large, 70, 80, 90 percent say, "Yes, we 
want flexibility in our work week." 

The problem is, then they all have to agree, this 
entire group of employees, on the same exact work schedule. It 
doesn't address the one working parent who wants to take Fridays 
off to work in her kid's classroom, another individual employee 
who wants Mondays off to go to school, another one who may want 
Wednesdays off to take some personal enrichment class or even 
attend religious functions. It just didn't accommodate that. 

So, part of the issue that I struggled with was, 
yes, you can. And Mr. Rankin can tell you that currently 


employees can vote for this individual flexability. But it only 
is true if two-thirds can agree to the exact same schedule. And 
employees told me, over and over and over again, "I want the 
flexibility/ but we can't all agree on the exact flexibility 
within that work week that we'd then have to live by for a 
year." And it doesn't accommodate individuals. It just doesn't 
accommodate individuals. 

And again, the last thing that I would say is 
that throughout this process, yes, I had a preconceived notion 
about whether I raised this idea or I did not. As a working 
mother, I loved the idea of having three days off. 

I work five days a week. I came home this 
weekend. I spent Saturday, all day, writing an overdue 
newsletter for a nonprofit organization. I spent Sunday taking 
care of household chores and errands. I never got a day off, 
because work five days. I love to volunteer. I love to do 
other work. And unfortunately, I have to do things around the 

CHAIRMAN LOCKYER: Ms. Black, you mentioned that 
if an employee who votes to establish flex time, that there's a 
problem or an obstacle in that they all have to take the flex 
time. It can't be just some employees. 

What causes that problem? Is that a law, or is 
that a regulation of the IWC? 

MS. BLACK: I would say that, as I understand it, 
Mr. Chairman, it's the regulation. And when we — 

CHAIRMAN LOCKYER: That's what I've heard, but 
I've asked for the IWC to verify that. 


And it seems to me odd if that's the case, and it 
seems to be that's the problem, that you don't change that 
regulation so that more targeted flexibility would be available, 
rather than a more sweeping take away. 

Part of the discussion that troubles me is, 
there's a lot of concern expressed about trying to help 
employees and provide for greater flexability. I would assume, 
since the law necessitates that, that someone would at least 
give lip service to that thought. 

But I accept the views from both of you as 
genuine in that regard. But the obstacle, since they can get 
flex time now under the current law with the vote of the 
employees, seems to be your own regulation that then doesn't 
allow it to be flexible enough so that, even though they vote to 
have it, they don't all have to do it. 

And it just seems odd to me that that wasn't one 
of the regulations discussed. 

My suggestion is, Ms. Black, that no one really 
wanted to make the current law work. What they wanted to do was 
get rid of it. 

MS. BLACK: I understand and appreciate your 
position. I don't know that I would necessarily agree with it. 

I know that all I can submit to you. Senator, is 
that when I first learned of the issue, I naturally embraced the 
issue. My effort during the course of the next 18 months was 
not to convince myself any further that this was wonderful. 

The job that I saw that was the greatest 
challenge to me was to sit down at the table with those who 


disagreed or had concerns with the issue and work with those 
individuals. Had someone sat and offered, as you just have, 
those suggestions, or said let's sit down and look at these 
regulations, and this is why in fact this doesn't work, then 
perhaps -- perhaps there would have been a different outcome. 

CHAIRMAN LOCKYER: I understand. Maybe it's not 
your responsibility as lay people to think of all these things, 
that somebody who is framing the issue that comes before you 
ought to have been aware that you solve the problem that you 
created. Not you personally. 

I mean, the orders of the Commission make it 
inflexible when you vote to have flex time, and then, so rather 
than dealing with that barrier, a much more sweeping solution 
was offered up. 

I understand that that may now be an 
afterthought, that someone could have looked at that regulation, 
but it does suggest that at least somewhere along the way, 
people wanted to frame the issue in a way that you were given, 
perhaps, fewer choices than might have been wise. 

MS. BLACK: Senator, Mr. Chairman, I understand 
what you're saying. I can't say that I even disagree with what 
you're saying. 

I think that the greatest frustration, as I've 
said all along, the polarization that in fact happens and occurs 
around this particular issue. 

The only thing that I can tell you as far as what 
I looked at specifically, and that carried a great deal of 
credibility with me, was, I should have been — it should have 


been easy to have determined in 47 other states that this was 
not working. There should have been evidence that there were 
violations, that employees were unhappy, that there was 
unemployment/ less wages earned. That evidence should have been 

What I found in looking at the issue, and looking 
at 47 different states is, it appeared to be working very 
well. Why reinvent a mouse trap that seems to be working very 
well in 47 other states? 

That was just a basic struggle that I probably 
see led to this proposal being put out, because why reinvent 
something that is working very well? 

CHAIRMAN LOCKYER: We hear that argument 
regularly, and I understand that it has a certain persuasive 

SENATOR BRULTE; Senator, I know you're just 
about ready to vote. I wanted to follow up just for the record. 

You said you debated Mr. Broad because you wanted 
to learn something from him? I just want to know, did you learn 
anything from him. And if the answer is no, I'd like to ask the 
rest of the audience. 

MS. BLACK: Senator, with all due respect, you're 
putting me on the spot here. 

SENATOR BRULTE: It's all right. 

CHAIRMAN LOCKYER: You've been doing fine. 

Let me make sure, just sort of in conclusion, if 
you heard any comment this afternoon that you wish to explain or 
rebut, either of you, please do now. 


MR. ALAM: I would like to address Mr. Rankin. 

I have great respect for him. He came here to 
testify against me. Just I want to put the record straight 
about the minimum wage. 

When I came on board, the minimum wage issue had 
already been kind of resolved. They had, I think, voted. They 
had conducted the wage orders for that. I had nothing to do 
with the minimum wage. 

And then the members, one of the labor members 
had resigned, and there were only three members left. And then 
Proposition 210 was passed for the — you know, to increasing 
the minimum wage to five dollars that the Commission adopted. 

So I, you know, his allegation that I did not 
raise the minimum wage is not correct because I was not part of 
it at that time. It had already been taken care of. 

Second thing, wage boards, he said that he did 
not agree with me for the wage boards. Well, the thing is, you 
know, they had put me against the wall there. It should be 
their way or there's no other way. I mean, there was no 
possibility of any compromise or negotiation. 

So, okay, I understand that, their point of view, 
very rigid. They don't want to negotiate. 

When we selected the wage board, he had all the 
freedom not to go attend those wage boards, but he went in all 
five wage boards, attended the meetings. So, I mean, he went of 
his free will. So, I mean, that does not count, that he did not 
like to have those wage boards conducted. 

And then about the loss of over-time, one billion 


dollar, there was no substantiation to that, I repeat. And, you 
know, we have different figures, 175 million, 833 million, and 
now it is 1 :jillion dollar. 

So, I just wanted to make this record straight. 
Thank you. 

CHAIRMAN LOCKYER: All right, thank you, sir. 

Any other questions or comments? 

I wanted to just make a couple of comments of my 
own prior to asking for a motion or making one, whichever would 
be appropriate. 

I've tried, Ms. Black, to look at injury 
statistics. It's sort of hard to compare, and I guess, even 
though it's a worn-out comment of comparing apples and oranges, 
I guess maybe Senator Brulte got to it when he mentioned that 
there's sort of different injuries counted in different states, 
or different reliability factors associated with the statistics. 

But at least with respect to fatalities, 
California is 20th of the 50 states, so kind of in the middle. 
And there are states higher and lower than us that are both 
industrial and rural, and so on. 

I don't know what to conclude from that, other 
than perhaps what you did indicate, that there at least wasn't 
any compelling evidence that you saw that there was a relevant 
health or safety factor to be considered in this particular 
context. Maybe there are some other statistics somewhere that I 
should look at. 

I intend to vote no on the confirmations, but I 
do want to say to you both, first, it's very hard to turn people 


down. You know, it's a real human being. It's not voting on a 
slogan or a theory, or something like that, and it's difficult 
to do, frankly. 

And you both are intelligent, engaging people who 
had good intentions, and have donated a significant amount of 
time to state volunteer service. And we owe you thanks for 
that, and also apologies that you had to endure some of the 
hardships and threats that you've mentioned. I think those are 
reprehensible, and it may be those of us that get a little more 
accustomed to that because in this type of work, you get 
hardened to that. But I think it's terrible and unforgiveable 
that you be treated in those ways. 

With respect to the issue, my views are these. 
First, that I think the Commission exceeded the statutory 
authority with respect to 8-hour days. I find the Legislative 
Counsel's opinion persuasive. I don't know who this Joe Ayala 
is, but I know he's not related to him. But he's the person had 
in Leg. Counsel that wrote a lengthy but pretty clear opinion 
that the Commission does not have the authority, in the absence 
of further legislation, to amend existing wage and hour orders 
on over-time. So, that would be sort of the first concern for 

The second is, tilting away from the statutory 
purpose, and I think you understand it and know what it is, 
which is basically a pro-employee tilt to the Commission's 
responsibilities, to look after the general welfare of 

The Hoover Institute study I find, as did 


Mr. McCarthy, methodologically flawed and worthy of disregard. 

Then, just as a matter of philosophy, it's my 
view that in a mature econoF ', it is better to have employers 
and employees work out these kind of things themselves, rather 
than have unilateral take-aways, and most especially 
disregarding the current rule that employees get to vote on 
these matters, I think, is a bad direction to go. 

Finally, that when there were bills offered, and 
there are bills under consideration, that we build more 
flexibility into the current law. To not embrace those, I 
think, is suggestive of an all-or-nothing approach. 

Mr. Alam has an additional burden, I think, of 
being appointed to a labor representative slot. And I think 
that criticism is more appropriate than someone who is in an 
employer slot, which is where one would expect there would be a 
tilt to that point of view. 

We have the problem of operating in a state where 
the Governor has extraordinary authority, more than governors do 
in most of the states. And one of the few ways we're able to 
indicate a different philosophy is with respect to the 
confirmation process. 

So, in many ways, I hope you will understand that 
a vote today is not meant to reflect on the conscientiousness or 
seriousness with which you have undertaken these jobs, but 
rather in more ways respective of our general philosophy and the 
points that I've made. 

But thank you both, and we appreciate your 
willingness to come. I'm certainly going to suggest to the 


Governor's Office that these are both worthy people who ought to 
be involved/ if they have continuing time or interest, in 
government/ and that he ought to find the more appropriate 
position that would be better suited for you both. 

Having said that/ if I can offer a motion, I'd 
move that we take them separately. Send Mr. Alam's nomination 
to the Senator Floor with the recommendation that we not 
confirm. So that those that would wish to confirm should vote 
no on that motion/ and those that would not confirm should vote 
yes on that motion. Sorry, it's kind of backwards/ but that's 
the way we have to get it out. We have to get it out to the 
Floor, is the point. 

Any questions/ comments? Ready to vote. 

Call the roll on the motion to send to the Floor 
a recommendation that we not confirm. Yes is for not 

SECRETARY WEBB: Senator Ayala. 



Ayala Aye. Senator Brulte. 


Brulte No. Senator Hughes. 


Hughes Aye. Senator Lewis. 

SECRETARY WEBB: Lewis No. Senator Lockyer. 

SECRETARY WEBB: Lockyer Aye. Three to two. 
CHAIRMAN LOCKYER: I'd make a similar motion, or 


ask that we substitute the roll, if that's agreeable, on 

Ms. Black, and that would be the order if there's no objection. 

Thank you for a difficult and long hearing. 

MS. BLACK: Mr. Chairman, thank you. I 
appreciate all the time that you've allowed us today, and I 
appreciate as well the roll that all of you serve in government 
very much. Thank you. 

MR. ALAM: Thank you. 

CHAIRMAN LOCKYER: I think we need a five-minute 
break for our reporter, if no one else. So, we'll take five 
minutes . 

[Thereupon a brief recess was taken.] 

CHAIRMAN LOCKYER: Good afternoon. 

I think we're going to have two opportunities to 
talk to Mr. Alarcon. Partly, there are Members who still want 
to talk to people, and review the record, and think about it a 
little, and ask questions at some subsequent hearing. 

But we have some time with our date here, May 
14th, so we have a couple of weeks at least. 

But I thought what we'd do, since there are some 
who've traveled and taken time off, we want to make sure that we 
get their comments on the record. 

Please, ahead and start, if you want to begin in 
any way. 

MR. SEARCY: Frank R. Searcy, S-e-a-r-c-y, 
President of the Chicano Correctional Workers Association. 

Senator, Chairman and Committee, thank you very 
much for this opportunity and for adjusting your hearing to 


accommodate us. 

I am here to offer our support to Mr. Alarcon. 
We find that he is very capable of the position that he has been 
nominated for. 

With that, I again wish that you would really 
consider his confirmation for Director. Thank you. 


MR. STARR: My name's Terrence Starr. I'm the 
Chief Probation Officer in Contra Costa County. I'm also a 
member of the Board of Corrections, so I've worked with 
Mr. Alarcon over a number of years. 

He's always been really cooperative with us in 
trying to get things that were mutually beneficial to the state 
and the counties done. 

I'm really concerned/ because I would also like M 
to see the Youth Authority in the hands of somebody who has been 
there, who knows the Youth Authority, and who can bring some 
continuity to things. I think it's really important now, as I 
think everybody here knows, we're going into a really strange 
time, and there are lots of things that have changed just in the 
last year. And I think we're going to have to have a lot more 
cooperation between counties and state, particularly Youth 

So, I hope that you will confirm him. I think 
he's a good man for it. 

I would be happy to answer any questions. 

CHAIRMAN LOCKYER: I don't know that we'll have 
them today, but they will be coming. 


MR. CLARKE: Good afternoon, Senator and Members 
of the Rules Committee. I'm Alan Clarke, and I represent the 
Chief Probation Officers As. i^ciation. 

In addition to what Mr. Starr has said, we 
support Mr. Alarcon and urge your confirmation of his 
appointment as Director. 

I think. Senator, you know because of your 
concern for juvenile justice and the number of juvenile bills, 
there's probably no more important agency to Probation than the 
Department of Youth Authority. Having a Director with his 
experience, and my years representing the Probation Department 
is close to 17 years now, I've had an opportunity to work with a 
number of directors, and he certainly fills the bill as 
certainly one of the best. 

We hope that you will vote to confirm him and are 
pleased to be here to urge our Association's support for his 
nomination as Director. 


MAYOR WOLK: Good afternoon. Senators. My name 
Lois Wolk, and I am the Mayor of the City of Davis, the city in 
which Frank lives. 

I know that you will hear much about his 
professional qualifications, but I am here to speak about his 
personal commitment to the issues of youth and youth in trouble 
in our society. And I want to tell you a bit about his 
community service in this area. 

Following the violent death of a junior high 
school student, we formed a Youth Crime Prevention Task Force, 


and Frank volunteered his time, and his efforts, and his 
knowledge to be a part of this commission. He volunteered. His 
arm wasn't twisted, and the commission and the Task Force 
definitely benefitted from his expertise, his knowledge, and his 
compassion. He helped us to advocate for the joint school-city 
efforts in the area of youth crime prevention that were 
necessary following the report, and he's also one of our best 
soccer coaches. 

So, I really encourage you to confirm his 
position. Thank you. 

MS. JONES-LONGMIRE: Hello. My name is Darlene 
Jones-Longmire. I'm the Chairperson for the Sacramento area 
Association for Black Correctional Workers. 

And we'd like to support or show our support for 
Mr. Alarcon for confirmation. He's done a good job, and we 
feel that he'll be a benefit to the Youth Authority. 

Thank you. 


MR. KOLENDER: Mr. Chairman, Members of the 
Committee, I am Bill Kolender. I'm the Sheriff of San Diego 
County, and I have been such for a little over two years. Prior 
to that, I was the Director of the California Youth Authority. 
Prior to that, I was the Chief of Police of San Diego for 13 

I am here to wholeheartedly support the 
confirmation of Frank Alarcon. I think he is an outstanding 
choice. When he worked for me, as I was Director of the Youth 
Authority, I thought that he not only did an outstanding job. 


but he prepared himself for the position that I hope you confirm 
him for. 

He proved himself to be a very capable Deputy 
Director. He is an outstanding professional with very high 
integrity and a true commitment to resocializing the youthful 
offenders that are sentenced to the CYA. He is not only 
respected by members of the Department, but he is respected by 
many people throughout this nation in the area of juvenile 
justice, and he enjoys the support of many persons from 
different constituencies who deal with our juvenile justice 

His leadership ability is outstanding. He has 
tremendous skills as a consensus builder, and has proven to be 
invaluable not only to the Youth Authority, but to the State of 
California as well. 

I can attest to the fact that the job of the 
Youth Authority is not an easy one. It is not simple. One only 
has to take a look at the current juvenile crime statistics to 
realize the enormous task that someone faces who leads this 
organization. These young people are the failures of every city 
and county in our state, and the Youth Authority is their last 
hurrah, as you know. 

I'm here to let this Committee know that Frank, 
through his years of hard work, his dedication, his passion, and 
his high integrity, I think he will be an outstanding leader to 
lead the CYA Into the 21st Century. 

CHAIRMAN LOCKYER: Sheriff, it's an unfair 
question. Does he do a better job than you did? 


[Laughter. ] 

CHAIRMAN LOCKYER: You don't need to answer. 
That's okay. It's very nice to see you again. 

MR. KOLENDER: They will probably say yes, I 
don't know. 

MR. LANE: Honorable Chairperson, it's nice to 
see you again, and to the rest of the Members of the Committee, 
my name is Regis Lane, Executive Director of Minorities in Law 
Enforcement. We're represented by the Correctional Peace 
Officers Association, the Latino Peace Officers Association, the 
Mexican-American Correctional Association, and 100 Black Men of 

I would just like to say on behalf of Frank 
Alarcon that I think he's an excellent candidate to remain the 
Director and be confirmed by this Committee. I say that not 
only because of his ability to do the job while he's been acting 
Director for so many years, and now the Director being appointed 
by the Governor. I say that because he's also committed and has 
an unabashed commitment to children in the community. 

We put on a California Children Policy Summit 
with the Childrens Advocates Round Table in October. It was 
three days of a lot of grueling work. Mr. Alarcon was there 
every day. And that's something that is unique, particularly 
with the Director and his responsibilities, that he found the 
time to do those type of things, and finds the time to be 
committed to those types of issues. And he continues to be 
committed to those types of issues. 

So, on behalf of the Minorities in Law 


Enforcement, I would like to ask for your most favorable 
consideration for Frank Alarcon as Director of Youth Authority. 

Thank you. 


MS. KATZ: Hi, Emily Katz with California 
Emergency Foodlink. We're a statewide distributor of emergency 
food, and we provide job training both here and in Southern 

And Mr. Alarcon has proven to be a great leader 
in the benefits of community volunteer work among parolees as 
well as rehabilitative job training. Our agency and the 
communities that we serve have benefitted greatly from this, 
both during disasters, when they bring not only the regular team 
of parolees who volunteer all year long, but kids from the boot 
camp and from other facilities to put in an extra 
around-the-clock effort to help bag food and get it out to 
communities . 

In addition to that — 

CHAIRMAN LOCKYER: Are they exempt from 8-hour 
day? I think they are. 

MS. KATZ: You may need to address that to 
somebody else. 

In addition to that, the parolees very proven one 
of the cornerstones of our job training program that benefits 
both parolees, homeless people, and people in the welfare to 
work transition. And many of the parolees who entered our 
program as beginning trainees have worked their way up to 
management positions and are now coaching other people through 


that work training program. 

SO/ we appreciate his support tremendously. We 
can see the benefit that it's given to youthful offenders who 
have shown a very low recidivism rate in our program, and who 
have provided the great benefit of food assistance and 

Thank you. 

MR. THOMPSON: Mr. Chair and Members, Jeff 
Thompson, representing the California Correctional Peace 
Officers Association, those peace officers employed by the 
California Youth Authority. 

Mr. Alarcon has the helm of this Department 
through fairly difficult times. As you are well aware, we've 
lost one of our officers last August at the Youth Training 
School in Chino. All the eyes have been watching Mr. Alarcon 's 
response to the evident need to improve staff safety, and 
related to that, just the general morale that coincides with 
whether or not the top man is in gear in dealing with those 
safety concerns. 

Our Association's 13 chapters and the Youth 
Authority met and has had discussions with Mr. Alarcon. And 
given the communication, which is the man's forte, with that 
line staff, they are pleased to provide a vote of confidence in 
him to handle the helm of the CYA during these times. 

We think, given the bulge in demographics of the 
young criminal coming up through the courts over the next few 
years, the challenges to YA are going to be numerous. We think 
the man has the experience, certainly the commitment to his 


staff, to adequately address their safety needs. 

For those reasons, we do look forward to working 
positively with the gentlemen, and we'll be hoping that your 
Committee urges confirmation of his appointment. 


MR. CEBALLOS: Hello, Senator. My name is Robert 
Ceballos. I am here as the spokesman for the Mexican-American 
Correctional Association, as immediate past President. Also in 
the room is Rachel Rios, the newly elected Northern California 
Vice President. 

We are here to support Mr. Alarcon and his 
nomination, and we ask that the Committee confirm his 
appointment. We believe that he is the person for the 
assignment . 

He has shown through his experience and the 
leadership that he has taken upon that he will lead and keep the 
Youth Authority as one of forerunners in the nation dealing with 
.the juvenile correctional system. 

Again, we ask the Committee to confirm 
Mr. Alarcon, and we know that he'll be able to lead the 
Department in the right direction. 

Thank you. 

MR. BROWN: Craig Brown, Director of Finance and 
former Director of the California Youth Authority. 

CHAIRMAN LOCKYER: Did he do a better job than 

[Laughter. ] 

MR. BROWN: Yes. I'm not running for anything. 


[Laughter. ] 

MR. BROWN: I worked with Frank since the early 
•80s around the Youth Authority. I think he's prepared himself 
very well for the job, and most importantly, his heart's in it. 
I believe he'll continue to do the outstanding job he's done for 
the last 15 so years. 

CHAIRMAN LOCKYER: Does he realize that he may 
become Director of Finance? 

[Laughter. ] 

CHAIRMAN LOCKYER: Have you warned him? Read him 
his rights? 

MR. BROWN: Any time. 

SENATOR BRULTE: If he's so good, how come you 
haven't brought him to Finance with you? 

MR. BROWN: Governor's appointment. 

MR. WARE: Mr. Chairman and Members, my name is 
Jim Ware. I'm a retired special consultant. 

I represent a team that has been going to all the 
various institutions. Just last week, we went into 
Mr. Alarcon's institution at Stockton. We started at 12:00 
o'clock at night, went all night long, all day the next day. 
And we found a lot of high professional, highly morale people. 

And we're going to go all the institutions, but 
I'm happy to say that he's doing — 

CHAIRMAN LOCKYER: What's this group you're doing 
this with? 

MR. WARE: I'm doing it — it's a group out of 
CDC appointed by Mr. Gomez. We've been going to all of the CDC 




CHAIRMAN LOCKYER: Are you CDC employees? 

MR. WARE: I'm a retired CDC employee. 

CHAIRMAN LOCKYER: Are they all in the group? 

MR. WARE: There are five of us. Some retired, 
some that are not. 


MR. WARE: But we're checking with everybody, all 


MR. ALLEN: Mr. Chairman and Members of the 
Committee, Ward Allen with the Teamsters. 

We fully support the confirmation of Frank 
Alarcon. One of the things that distinguishes, I think, a great 
leader is the willingness to get into different things. 

When we went to Frank and his supervisors and 
said, "Look, we'd like to do some job training. We'd like to it 
out at the Foodlink, and we'd like to have your folks involved." 
Let me tell you, they were overjoyed. 

We are looking, and we hope to be able to put 
hundreds of CYA wards through training and to work. We're going 
to do it in Northern California; we're going to do it in 
Southern California as well. We think it's very important. 

Frank has been a real leader, and his people have 
been enthusiastic supporters. And I can tell you, that kind of 
support comes right from the top. It doesn't go from the bottom 

We recommend that you confirm him. Thank you. 



Anyone else that wishes to comment now? Is there 
opposition present? 

I note that we've received letters of opposition, 
so for the record, I'll just mention that. 

YeS/ sir. 

MR. MARIANO: Mr. Chairman, my comments are a 
little bit more lengthy. If I could just have equal time with 
all the previous speakers, I'd appreciate it. 


MR. MARIANO: My name is Silas Mariano. I'm the 
Business Administrator at the Heman G. Stark Youth Training 
School in Chino. That's the Youth Authority facility. I'll 
refer to it as YTS. 

I've been working for the Youth Authority for 
nearly 27 years; 22 years as a supervisor and manager. At this 
time, I'm the number three person at the YTS in Chino. 

I've also worked at numerous locations throughout 
the Youth Authority in both Northern and Southern California. 

I worked five years directly with Mr. Alarcon. 

I've also worked for a number of years as a 
consultant around the country to different correctional 
agencies. My areas of expertise are emergency preparedness, 
crisis intervention, and supervisory practices. 

I also need to tell you, I'm what a lot of people 
would refer to as a disgruntled employee. 

CHAIRMAN LOCKYER: We call them whistle blowers. 

MR. MARIANO: I guess that's maybe a little 


better, I don't know. 

I believe, although, that I have that reputation, 
I also have a reputation for integrity, and I have a reputation 
of being dedicated to the mission of the Youth Authority. 

I'm hear today to speak in opposition to 
Mr. Alarcon's confirmation. 

I've known Mr. Alarcon for, professionally and 
personally, since he came to the YA. I think that was over 12 
years ago. He promoted me to two management positions, and I've 
socialized with him, although I'm not implying that those are 
related issues. 

I believe him to be personable, visionary, 
articulate, energetic and committed. I can co-sign many of the 
things that the previous people have said. I know he's also 
very experienced in governmental service. I think I could add 
that on the positive side of the ledger. 

However, based upon actual performance of policy, 
operations and security in the Youth Authority, where he has 
been either the Chief Deputy Director or the Director off and on 
for nearly nine years, I believe him to be responsible, if not 
personally, ultimately, for gross negligence, unethical 
behavior, and not accepting responsibility for major problems in 
the Department. 

The letter I distributed itemizes these problems 
and situations, although I'd like to add a few comments as I 
highlight the letter about security issues. After I highlight 
the problems, I believe you'll understand why he should not be 


I have first-hand knowledge of many of these 
problems. I have offered to provide the names of additional 
witnesses to the staff if necessary. I have documentation of 
some of the incidents, since I was directly involved in the 
incidents, and I am willing take a polygraph on any testimony 
regarding incidents which I directly observed or participated 
in. So, if I might just highlight the issues in the letter. 

The first area is Attempted Murder Incident 
Review. This happened in 1991 at our facility in Stockton. 

Briefly, an employee was raped, strangled and 
beaten. The ward who did this actually yelled at her, "How come 
you're not dead yet?" So, to characterize it as attempted 
murder, I think, may even be an understatement. He got nervous 
and left. 

The investigation was terminated by Mr. Ed 
Wilder, who's currently the acting Deputy Director. He made the 
following statement to the investigator: "Why are you making so 
many good people look bad?" 

He ordered the investigator to write a summary of 
what had occurred on the investigation to date, and did not 
forward the summary to the Director — to the Chief Deputy 
Director, Mr. Alarcon, who initiated the investigation. 

When the investigator asked Mr. Alarcon how he 
liked the investigation report, Mr. Alarcon told him that he 
hadn't seen it. He only saw the one-page — he had seen a 
one-page summary from Mr. Wilder. I informed him that the 
summary was actually six pages, and it had my signature on it 
because I was the investigator. 


Mr. Alarcon asked me to FAX the report to hiiti, 
which I did. Shortly thereafter, I was told that I was 
inappropriate to be a manager in institutions. I was returned 
to my lower paying position in Central Office. 

Mr. Alarcon did not instruct me to finish the 
investigation, nor do I have any information that the 
investigation was completed. 

And worst of all, I can say that no action was 
taken against Mr. Wilder because of this unethical decision. 
And probably the worst part of it is, there was an incident six 
months later where an employee was hit over the head with a 
pipe. And if the report, if my report — 

CHAIRMT^ LOCKYER: I assume it was by a ward 

MR. MARIANO: By a ward, yes. 

If my report had been distributed, and if there 
had been some systematic way of making changes, some of the 
issues — I know for a fact that some of the issues in the 
hitting over the head by the pipe were similar to the ones in 
the rape. So, the corrections might have been made that could 
have prevented the second incident. 

Many of you have heard about the issues at YTS 
surrounding the employee's murder. There's been a Senate 
hearing on it. 

The incident review report, which I had the 
opportunity to review, focused primarily on the logistics and 
chronology of how the incident occurred. Very few management 
issues were mentioned. For instance, let me give you a couple 


of examples of policies which Mr. Alarcon was responsible for. 

Last summer, the Governor signed legislation 
requiring most of the M numbers inmates held in the Department 
of the Youth Authority to be transferred back to the Department 
of Corrections. The Department was unable and unprepared to 
implement the operations necessary to transfer those M numbers 
quickly as soon as the legislation took effect. 

At Youth Training School, the staff found out 
about it before management came to work in the morning and could 
deal with it, because it was announced over the radio on a news 
program. We were unprepared to deal with those M numbers. The 
Superintendent, Mr. Vander Weide, quickly took action to place 
those wards on temporary detention, which means lock-down. 

In the past, any inmate in the Youth Authority 
who it was decided was going to go to Corrections was placed on 

Two days later, Mr. Barnett, then acting Chief 
Deputy Director, called Mr. Vander Weide — this is according to 
Mr. Vander Weide — and instructed him to do a modified 
lock-down, which would place 4 62 M numbers at YTS out in the 
living unit programming. Now, not all on the same living unit, 
in smaller groups, under control of staff, as would be a normal 

However, since these people are considered very 
dangerous, they should have been kept on temporary detention. 

I believe this reflects the lack of judgment in 
Headquarters about how to handle serious problems and 
situations. And in fact, one of those inmates actually killed 


a staff member. 

It's my personal belief that that person should 
have been locked down in his room at the time and not a member 
of the clean-up crew. 

And the responsibility for how to handle those M 
numbers after the legislation was signed by the Governor rests 
in the Director's office. 

We had a previous situation at YTS where three 
inmates were told they were going to Corrections, and a middle 
manager let them off lock-down and put them on more of an open 
program status. Those three inmates stabbed two other inmates. 

When I informed the Director about this, after 
the Superintendent told me nothing was going to be done to the 
middle manager because of his negligence — I did it through 
E-mail, and I did it through subsequent letters that I have 
written about other issues — nothing was ever done to that 
middle manager because of his gross negligence which resulted in 
two inmates being stabbed. 

There are other issues about YTS and the cleanup 
of YTS, but my general comment is, if Mr. Vander Weide, the 
Superintendent, and Ms. Shaw, the Deputy Superintendent, are 
being removed, and I believe this is a quote, "because they are 
highly ineffective, " and if the Deputy Director actually retired 
when he was told there were no positions left for him in the 
Youth Authority, what is the appropriate action for the 
Director, and now the new acting Deputy Director, people who put 
systems in place and people who approve the appointment of 
managers which they are now determining are incompetent and need 


to be moved? 

My personal belief and the belief of many people 
in the Youth Authority is, responsibility should go all the way 
to the top. If it's inappropriate for that Superintendent to 
remain in position, it's inappropriate more so for the Director 
to remain in position. 

One system I'll give you an example of is the 
entry system for accounting for staff. Because of over-time 
requirements, the Department believed that you couldn't account 
for people at the front door because they would have to walk 
over to the living units on the clock. That could create an 
over-time situation because the staff shifts would have to 

Anybody in the United States that's running a 
prison knows you have the responsibility, as a manager of that 
prison or of that prison system, to account for people going on 
and off grounds. 

Yet, the Director's office instructed the 
institutions to put in place a system where we could not 
actually say whether somebody was on grounds or not. And in 
this case, after the employee was murdered, if we had a system 
in place, we may have been able to locate her within two hours, 
say, of the end of her shift. 

This resulted in two days of staff searching 
through a dump site. Forty-five hours later, her body was 
found, because of a system put in place by Headquarters. 

I have a section here on sexual harassment that 
I'm not a direct witness to. These are perceptions of many 


people inside the Department. I don't have direct information 
about these. "• 

The general perception is, we got a letter last 
year, I think it was signed by Director Brown, basically laying 
the law down on sexual harassment. Each Director, really, in 
the Youth Authority puts out a similar letter, emphasizing their 
support for preventing and responding to sexual harassment. 

But the perception is that right now, we're under 
the instruction that if a supervisor does something wrong, and 
it's determined by the Department as wrong, they won't even 
represent the supervisor, which, I think, is debatable whether 
we should or not. But the perception is, you can work in the 
Director's office and have a history of this kind of thing, and 
it's okay. 

The nepotism issues, we have people at a higher 
level in the Department who have promoted and given special 
assignments to relatives, while people at the first line 
supervisory level and at the management level in the 
institutions are involuntarily transferred or, in some cases, 
just told they can't take a promotion if they're going to work 
in the same section as a relative. 

Again, I think that's a double standard. 
Mr. Alarcon was informed by me in these examples in March of 

I'd like to jump to the security issues, and then 
I'll close my comments. 

In the area of institution security, Mr. Alarcon 
has left us unsafe and unprepared. Seven of our eleven 


superintendents, all who have been appointed during his watch 
either by his decision or by his strong recommendation as Chief 
Deputy Director, have little or no security knowledge or 
experience. Persons have been promoted to Chiefs of Security 
with little experience, little security experience. Persons are 
promoted to Watch Commander, which is a lieutenant in our 
Department, other than on the basis of competency and 
experience . 

There is no specialized training for control room 
staff, which is the heart of the institution for communications, 
especially in emergencies, or watch commanders. 

A fire arms policy was implemented which sends a 
pair of officers into the community. One of them is armed, and 
one of them is unarmed. Can you imagine sending two police 
officers out on similar duty? We have been subject to ridicule 
in the Department when other agencies became familiar with our 
policy. Plus, the policy is inherently dangerous. 

Security audits have been conducted annually but 
only by mail. The institution sends a memo and says, "We 
reviewed our security practices, and we're in compliance with 
the manual . " 

These problems continued, despite one murder, one 
attempted murder, escapes, numerous stabbings, group 
disturbances, and two hostage situations since 1990. 

Recommendations have been made repeatedly to Mr. 
Alarcon and Mr. Wilder to bring the Department up to national 
standards for emergency preparedness, but they have done 


Over a year ago, a committee was formed. I think 
it was while Director Brown was in office, was in the Director's 
position. Over a year ago a committee was formed to look into 
the issue, but nothing has been done to date. 

Recently, the Director initiated an operations 
review process. This may or may not improve security. He is 
responsible, however, for the current situation for the last 
number of years. So, we can look to the future and say this 
might have potential, but my statement is that he's responsible 
for the problems that we're having now. 

I ask you to consider the impact of a yes vote on 
public, staff, and ward safety, and to hold Mr. Alarcon 
responsible, as he's held those under him responsible, and I ask 
you to vote no on his confirmation. 

Thank you. Do you have any questions? 

SENATOR AYALA: I have some questions. 

You indicated that all the superintendents have 
been appointed by Mr. Alarcon? 

MR. MARIANO: I believe they've all made 
superintendent while he was either Director or Chief Deputy 

My understanding of the process, having worked 
near the Director's office and been in it, Mr. Alarcon as Chief 
Deputy Director had a lot of influence with both Directors 
Brown, Kolender, and I believe even Trujillo. 

But I think most of them have been appointed to 
superintendent jobs in the last seven years. 

SENATOR AYALA: You're indicating that those 


people that were under Mr. Alarcon were in office for a number 
of years, and no improvements were made during that period of 

I first want you to know that I have been 
familiar with YTS since Lyle Eagan was the Superintendent there, 
and so, I'm familiar with when they were building the 
institution, too, so I know what it is. 

MR. MARIANO: Yes, sir. 

SENATOR AYALA: I think the problems at YTS are 
not something that occurred during his watch necessarily, but 
that occurred under many superintendents and directors before 
Mr. Alarcon took office. 

I'm not necessarily saying that he's not 
responsible for some of these, but what I'm saying is, many of 
the things that you've indicated, and I've been on top of this 
for the last six months, since the last murder took place there. 
I've been meeting daily with people from the Department of 
Corrections. I have more time spent on these folks that I begin 
to feel like a warden. 

But I can tell you that I'm not going to say for 
a moment that they don't need to be improved, both the YTS and 
the Department of Corrections. They need improvement, I can 
tell you that. 

But I don't think they can say that it all 
happened in the last few years. They've been at it ever since I 
can recall. Back in the '60s, I had some arguments with Lyle 
Eagan about what was taking place. 

So, it isn't anything new. I just think it's 


just reached a point where something has to be done, at both the 
Youth Authority and the Department of Corrections. 

MR. MARIANO: l-:ay I respond to that. Senator? 


MR. MARIANO: I worked at YTS in the '70s. I 
think I've described it to people as a battle zone when I worked 
there. Of course, I was a lot younger then and I made it. 

We have had professional institution management 
since that time. As a matter of fact, while I was there, we got 
a very professional superintendent. 

Mr. Alarcon's been in the Director's office for a 
number of years now as either Chief Deputy Director, Acting 
Director, or as Director. And I believe there is a 
responsibility there. And I've tried to itemize in the letter 
those things where Central Office is responsible versus the 

I also believe, by the same standard he 
established with Mr. Vander Weide and Ms. Shaw, that he, too, 
should be removed from his position. They were only in the 
institution six months before the murder occurred, and they're 
being held responsible for all the operational problems. So, I 
believe Mr. Alarcon's been around longer than that. 

SENATOR AYALA: Mr. Vander Weide took office six 
months ago? 

MR. MARIANO: It was December of '95, and the 
murder occurred seven months later. 

SENATOR AYALA: But he's a product of the system. 
He started, I remember Mr. Vander Weide when he was a 


correctional officer, and he moved through the system. And I 
understand he did a good job in other institutions, Vernalis and 
where ever he's been, but I have evidence to show he didn't do 
that good of a job at YTS. 

I don't know whether the Director or the Deputy 
Director have to be on top of these men, or women, whatever the 
case. I know it's difficult to do that, but they have to do it. 
They're going to have assume that responsibility you're 
referring to. 

MR. MARIANO: I agree in part. Senator. 

When I first got to YTS, again, in February of 
'95, I was there about three months. I made three approaches to 
Mr. Alarcon to discuss the problems at YTS. I've highlighted 
those problems in other letters that I've provided to the staff. 

Mr. Alarcon had the opportunity, in '95, to do an 
operations review and clean up YTS, and he failed to do so. 

So, I believe he does have the knowledge of those 
previous problems, and he does have responsibility. 

SENATOR AYALA: Some of those responsibilities 
and problems have occurred as a result of CCPOA. For instance, 
everyone taking a key home, which to me was something that I 
could never understand, as a result of negotiations between the 
union and the Department. 

MR. MARIANO: I don't believe that the management 
of the Department can afford to negotiate or abdicate their 
responsibility for tracking people's entry into an institution, 
which is really a prison — you know the facility in Chino — 
because they have to go to collective bargaining, or there's a 


threat of a court case. 

It's our responsibility to maintain a system 
where we could track people, which we did the week immediately 
after the murder occurred. It took a murder for us to meet our 

SENATOR AYALA: You're right. Unfortunately, we 
did a lot of things there that should have been done a long time 
before, because I was in the middle of that thing from the 
beginning, and I toured the facility, and I toured the murder 

And as someone who's had experience in prisons as 
a Marine guard, I was shocked that it would happen in a prison, 
someone could get murdered and no one would miss the individual 
until the next morning when the husband called to see if she's 
working over-time. Yet, the car's parked up in the parking lot, 
and the keys are still in the hole. 

So, that was shocking to me that that could 
happen within a prison. The potential for that is always there 
because of the type of people you have behind bars, and you 
never turn your back on these people. But I don't understand 

So, I don't know who's responsible for that. I 
don't know it's necessarily something that occurred in the last 
six months. This has been going on for quite some time. 
Finally, I think, the dam broke, and now we're trying to fix it. 

SENATOR BRULTE: Would you explain for us again 
what an M case is? 

MR. MARIANO: I'm not sure I can do all the 


technical explanation. 

SENATOR BRULTE: Give me your best. 

MR. MARIANO: These were offenders sentenced to 
the Department of Corrections under the age of 2b, and they were 
doing their time in the Youth Authority. 

Then the law changed. The law change treated 
them differently based on their expected parole date by a 
certain age. 

Basically, I think, at YTS, it resulted in 400 of 
the -- and these numbers may be off by 20 or so — 400 of the 
462 actually being transferred out. 

SENATOR BRULTE: That were going to be 
transferred from Youth Authority to CDC? 

MR. MARIANO: Yes, once the law was signed by the 
Governor last summer. 

SENATOR BRULTE: And your contention is that they 
should have immediately been put into lock-down? 

MR. MARIANO: Yes, and they were put into 
lock-down by Mr. Vander Weide when he came to work that morning. 

My opinion is, the Department was ill prepared, 
and we were hearing from the wards that the Governor had signed 
the legislation. 

SENATOR BRULTE: How many Youth Authority 
institutions had M cases? 

MR. MARIANO: I'm unable to answer that. 

SENATOR BRULTE: I'll have questions for the 
Director at some point. 

Are all the M cases currently transferred out to 



MR. MARIANO: I believe we have a handful of M 
cases whose parole date is either before their 21st or 23rd 
birthday, but I'm not exactly sure of that. 

SENATOR BRULTE; But your best guess is, most of 
them have been transferred out of YTS? 

MR. MARIANO: Oh, yes, yes, a large percentage, 
over 90 percent. 

SENATOR BRULTE: Institution wide or just YTS 

MR. MARIANO: Institution — YTS wide, 
institution wide. I don't know the status around the 
Department . 

SENATOR BRULTE: Following the murder, you say 
that Mr. Vander Weide put them all into lock-down. 

Was that institution wide or just YTS specific? 

MR. MARIANO: I was in the management meeting 
when he instructed all the M numbers to be placed on temporary 
detention, which is a lock-down status. Any time they come out 
of a room, there's one at a time, maybe two at a time, and extra 

SENATOR BRULTE: Would you share with me what you 
meant by the key process? Senator Ayala alluded to it. 

There was no mechanism whereby there was a 
tracking of employees? 

MR. MARIANO: Formerly, before the discussions 
with the union that Senator Ayala referred to, there was a FLSA, 
Fair Labor Standards Act issue about over-time. If you turn 


your keys in at the front door, and then we know you're there by 
your ID card, or your keys are not there, and you might have to 
walk 200 yards to go to work. 

The union's position, I believe, was that you 
were on the clock while you walked that 200 yards. 

Well, if one employee gets off at 2:00 P.M., and 
the other one is on at 2:00 P.M., and they both have to be — 
you have to have one person in that living unit at a post, you 
can see that you're going to have 400 yards of time when the 
employees walk to and from their jobs. So, the Department was 
no longer tracking people from the front door, and they were 
paying them from where they were working. 

Also at YTS, the keys were issued so that 
employees did not have to stop and check their keys out, which 
the interpretation at the time, I believe, was, they would 
actually be on the clock once they picked up their keys. 

SENATOR BRULTE: So, you couldn't track, you 
couldn't find — 

MR. MARIANO: Once we stopped having — 

SENATOR BRULTE: — the employee that was 

MR. MARIANO: Yes, Senator. 

Once we stopped picking up keys or turning in ID 
cards at the front door, we had no way of answering the 
question, "Do you know whether staff or visitors are on 

SENATOR BRULTE: Is that policy still in 


MR. MARIANO: No. Immediately after the murder, 
we provided the staffing necessary to set up a very complex 
manual ID system up by the front door. And currently, I 
believe, the Department's planning to do an electronic entry 
system for a better tracking system that won't be so labor 

SENATOR BRULTE: When you say we, is that YTS 
specific or industry wide? 

MR. MARIANO: It's my understanding all 
institutions implemented a similar system. 

CHAIRMT^ LOCKYER: Have you concluded? 

SENATOR BRULTE: You began by potentially 
labeling yourself a disgruntled employee, or resisting anyone's 
attempt to do that, and Senator Lockyer corrected you and said 
whistle blower. 

MR. MARIANO: I think I'm both disgruntled and a 
whistle blower. 

CHAIRMAN LOCKYER: A disgruntled whistle blower. 

SENATOR BRULTE: Try to be in the minority party 
here in Sacramento if you want to be really disgruntled. 

MR. MARIANO: I think I know what that feels 

SENATOR BRULTE: If we were to look — I have to 
take your word for this, I assume -- if we were to look in your 
personnel file, would we find that you're, on the whole, an 
employee that's received outstanding ratings? 

MR. MARIANO: I've received outstanding ratings 
throughout my career, and I believe the staff received good 


personal recommendations or comments about me from Mr. Brown and 
Mr. Alarcon. 

SENATOR BRULTE: While you may be a disgruntled 
employee, you're one that is held in high regard? That's a 
value judgment. 

MR. MARIANO: I feel that with the people that I 
work with, yes. 

SENATOR BRULTE: You're still working? You're 
number what, one, two, three, four, five? What is the Business 

MR. MARIT^O: It's the number three position at 
the Youth Training School. 

SENATOR BRULTE: How long have you been in the 

MR. MARIANO: It'll be 27 years in July. 

SENATOR BRULTE: Where did you begin? 

MR. MARIANO: El Monte Parole as a parole aide. 

SENATOR BRULTE: And then where did you go? 

MR. MARIANO: This is my 20th job. I went into 
Nellas in Whittier as an intermittent group supervisor, and then 
through various jobs at Youth Training School. Then 17 years in 
various jobs in personnel training. I was the training manager 
for the Youth Authority. I was Assistant Superintendent at 
Stockton when I did that investigation. I was head of Internal 
Affairs for four months. I was on a special assignment at the 
Director's office for six months. I was Assistant 
Superintendent of Ventura School. 

I'm probably leaving half a dozen out. 


SENATOR BRULTE: You had made a comment, and I'll 
check the record for this, and Evelyn, maybe by the time we have 
the next hearing, I can see the transcript. 

You had made the comment that lieutenants were 
approved at the Headquarters level? 

I'm unclear about the structure of the agency. 
Mr. Alarcon is the Deputy Director and Acting Director. He 
hires a superintendent to run an institution? 

MR. MARIANO: The Director's — my understanding 
of the process is, the Deputy Director of Institutions comes to 
the Director's office, being the Director and the Chief Deputy, 
which is the position that Mr. Alarcon primarily held over the 
last few years, with what they want to do, or they sit down and 
discuss it. Then the Director or Mr. Alarcon would take the 
list to the agency, Mr. Sandoval, and say, "This is what we want 
to do." 

I believe the agency or the — I don't know what 
happens after that part of the process, whether approved by the 
Governor's office or the agency. 

SENATOR BRULTE: When were you put in your 
current position as number three at YTS? 

MR. MARIANO: February of '95. 

SENATOR BRULTE: And who appointed you to that? 

MR. MARIANO: Mr. Alarcon. 

SENATOR BRULTE: Where were you previous to that? 

MR. MARIANO: I was the Assistant Superintendent 
at Ventura School. 

SENATOR BRULTE: Who appointed you to that? 


MR. MARIANO: I'm not sure. I know Mr. Alarcon 
approved it. 

SENATOR BRULTE: One last question. 

Why, given the fact that we had seven or eight -- 
again, I'll check the record — people come up and speak in 
favor of this appointment, and you're the only one speaking 
against it, why do you think that is? 

I understand I'm asking you to draw a value 
judgment . 

MR. MARIANO: Well, I know why some people aren't 
here, at least based on what they would tell me. 

If you notice, many of the people that are here 
are representatives of professional or ethnic organizations, or 
the Peace Officers Association. 

People in the line level, or managers who might 
agree with my position, or people that have knowledge of these 
things, some of those people that have knowledge of these things 
are in this room, and they are the Director's immediate 
subordinates. So, I wouldn't expect them to come up here and 
acknowledge particular issues, or they would have a different 
perception of it than I would. 

Most of the people who can tell you about these 
problems work inside the Department. Most of those people are 
planning to take promotional examinations. 

At this point in my career, I'm more interested 
in ethics and the good of the Department than I am — I know 
what's going to happen tomorrow. Even though I don't believe 
there'll be some type of formal retaliation, there'll be a major 


shunning, or people won't smile or talk to me. You know, 
whatever, there'll be some kind of informal things. 

I think most people — 

SENATOR BRULTE: Let me take a minute to advise 
anyone who's within the sound of my voice that we haven't 
confirmed this appointment yet, so any shunning would be a very, 
very bad idea. 

MR. MARIANO: But for the last couple of years, 
I've been aware that the Department doesn't see me as 

This is the first time I've spoken up outside the 
Department, but I've spoken up many times. I gave Senator Ayala 
reference to letters I've written and attempts to contact 
Mr. Alarcon about problems. 

I think one thing people would say about me 
inside the Department is that I'm outspoken, and this is 
important enough to me to be here today. I was asked, why are 
you here today? I said, because it's very important for me to 
be here from an ethical and professional standpoint. 

CHAIRMAN LOCKYER: Who asked you that? 

MR. MARIANO: People in the hallway have asked me 

SENATOR BRULTE: I have no other questions. 

CHAIRMAN LOCKYER: Is there anyone else? 
Assemblywoman, come on up. 

Thank you, sir for your willingness to come 
forward. Quite frankly, it's one of the few ways we hear about 
what goes on within these large bureaucracies, is when people 


are willing to subject themselves to criticism by saying the 
Emperor has no clothes, or however you want to define the task 
of pointing out possible errors in judgment. So, it's helpful. 

SENATOR BRULTE: Just for Mr. Alarcon's benefit, 
we're going to be in Washington next week. 


If he or anyone wants to comment on these matters 
today, they can. But we'll have another full hearing and 
interview him personally at a sub sequent meeting. That'll be a 
week from Monday, I think. May 5th. 

SENATOR BRULTE: Then I would like to ask Evelyn, 
when do you think you could get the transcript to me. 

CHAIRMAN LOCKYER: In a few days. You'll get it 
in plenty of time. 


MR. MARIANO: Thank you. 

ASSEMBLYWOMAN THOMSON: My name is Helen Thomson. 
I'm an Assemblyperson representing the 8th Assembly District, 
which is Yolo and Solano, and a little sliver of Sacramento 

I didn't expect to testify today. I came in 
expecting this would all have happened, and it'd be a slam-dunk, 
but obviously, I'm still learning my way around this place. 

CHAIRMAN LOCKYER: We never know, either. 

ASSEMBLYWOMAN THOMSON: I have known Mr. Alarcon 
in a different way from, perhaps, some of the testimony that 
you've heard today. I've known him personally for 20 years, 
since he has resided in Davis for at least in a long. 


I was on the School Board in Davis for 12 years. 
And I was member of the Board of Supervisors for 10. During all 
of that time, Frank has been a very active member of our 
community. He served as the Chair of the Mental Health Advisory 
Board for number of years, always and advocating for young 
people, always advocating for treatment services, for resources, 
for rehabilitation. He was always there for prevention. 

And I think that's something that I would hope 
that you would take into consideration as we look at what some 
of the youthful needs are in the state these days. 

His personality is one of tenaciousness . He 
coaches some soccer, and he's very involved in that in our 
community. He's very involved personally in a lot of the youth 
activities himself, and I think that those things all speak to 
the total character and personality of the man that you are 
considering for this appointment. 

If my and advocacy has any value to you, I would 
certainly commend his appointment to you. I think he has the 
right abilities, and he has the right attitude. And I would 
hope that he can be there to help us work our way through what 
we're going to do with the youth of this state who end up in the 
correctional system. 

CHAIRMAN LOCKYER: We're delighted to hear from 
you, and your long history is significant and helpful. Thank 

MR. GOLDBERG: Lenny Goldberg. I lobby in the 
Capitol on a variety of public interest issues. 

And I have also known Frank Alarcon in the 


community. We've been soccer dads together. Our daughters are 
best of friendS/ and we have occasion to spend a great deal of 
time together and talk about a wide variety of issues. 

I would say there's no question within the 
community of Davis, Frank is an exemplary leader. He has been 
very active in soccer, and youth look up to him. He dedicates a 
tremendous amount of his time in the far ranging discussions 
that we have. 

I have no doubt that he is truly committed to the 
youth in the Youth Authority, and that as a long standing civil 
servant and not a political appointee for the State of 
California, I think Mr. — I think the State of California 
should be grateful to have Frank Alarcon as someone in a 
position of this amount of power. 

So, I strongly commend his approval to you. 
Thank you. 


Anyone else that had wished to comment. 

Do you want to reserve the time until May, 
Mr. Alarcon? You can do it either way. 

MR. ALARCON: You tell me. Senator. I could 
respond to comments of one opponent now or wait. 

CHAIRMAN LOCKYER: I think I'm getting wait 
signals from Members, so maybe that's the appropriate thing, if 
you don't mind. 

MR. ALARCON: I ' d be happy to, thank you. 

CHAIRMAN LOCKYER: Let me ask one final time, has 
everyone had an opportunity to comment that would wish to? 


Thank you, sir. 

MR. ALARCON: Thank you. Senator. 
[Thereupon. This portion of the 
Senate Rules Committee hearing was 
terminated at approximately 5:15 P.M.] 
— ooOoo — 


I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Coirtmittee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

IN WITNESS WHEREOF, I have hereunto set my hand this 

o^^ day of L^C..;;0^ , 1997. 



:lyk j. wizi 
Shorthand Reporter 


Additional copies of this publication nnay be purchased for $4.50 per copy 
(includes shipping and handling) plus current California sales tax. 

Senate Publications 

1 020 N Street, Room B-53 

Sacramento, CA 95814 


Make checks payable to SENATE RULES COMMITTEE. 
Please include Stock Number 323-R when ordering. 

o o 





JUN - 2 1997 





ROOM 113 


3:35 P.M. 





ROOM 113 


MONDAY, MAY 5, 1997 
3:35 P.M. 

Reported by 

Evelyn J. Mizak 
Shorthand Reporter 










GREG SCHMIDT, Executive Officer 

PAT WEBB, Committee Secretary 

NANCY MICHEL, Consultant on Governor's Appointments 


California Youth Authority 

BOBBY BIVENS, President 
NAACP, Stockton Branch 

DOSSEY DOUGLAS, Perspective Employee 

California State University 



State Board of Education 

KEITH P. BISHOP, Commissioner 
Department of Corporations 



California Medical Association 


Consumers for Quality Care 

Health Access 



CARLA WOODWORTH, Executive Director 
California Physicians Alliance 

CHARLA COOPER, Complainant 

JO GODFREY, Complainant 


American Medical Group Association 



Proceedings 1 

Governor's Appointees: 


California Youth Authority 1 

Background and Experience 1 

Questions by CHAIRMAN LOCKYER re: 

Recommendations that Derived from Staff 

Murder at YTS 4 

Perceived Problems at YTS 6 

Noncompliance with Standards 7 

Various Audits and Review 8 

CDC Recommendations 10 

Questions by SENATOR AYALA re: 

Covering of Windows at Chaderjian 11 

Determination to Uncover Windows 15 

Turning Off Perimeter Lights at Preston 

School to Save Money 16 

Rape of Female Inmate at Ventura School 
Infirmary 19 

Security Problems at YTS Prior to 

Murder of Staff Member 22 

Policy Regarding Keys 23 

Wearing of Personal Alarms 24 

Questions by SENATOR BRULTE re: 

Definition of M Case 25 

Increased Security Risk at YTS 26 

Proposal to Transfer M Cases to CDC 27 

Department's Lack of Anticipation of the 

Anxiety Level Due to Transfers 30 

Limitations Placed on Incident Review 

Team by Criminal Investigation 31 

Expansion of Investigation 33 

Check-in/Check-out System 34 

Personal Security and Supervisorial 

Experience 35 

Self Audits by Institutions 36 

Current M Cases in Department 37 

Murder Incident at YTS 38 

Reasons for Appointing Superintendent and 
Assistant Superintendent at YTS 38 

Ultimate Actions by Director regarding 
VanderWeide and Shaw 40 

System-wide Changes Initiated by YTS 

Incident Review : 42 

Problems at YTS since Instituting 

New Procedures and Policies 44 

Personnel Record of VanderWeide 45 

Likelihood of Independent Reviews vs. 

Self Audits if YTS Incident Hadn't Occurred ... 46 

Questions by SENATOR AYALA re: 

Prevalence of Nepotism at YA 47 

Request for Report on Preston School ' s 

Practice of Turning Off Perimeter Lights 48 

Plans for CYA Statewide Audit 48 

Questions by SENATOR HUGHES re: 

Difficulty Getting Staff to Accept 

Southern California Assignments 49 

The Institutional Self Audits 50 

Peer Reviews 50 

Inner Feelings after Murder Took Place 

at YTS 51 

Steps to Prevent Future Incidents 52 



Various Check-in/ Check-out Policies 

at Institutions 53 

Witnesses in Opposition: 


Stockton Chapter 



Position of Group Supervisor 62 

Questions by SENATOR HUGHES re: 

Textured Discrimination 64 

Questions by CHAIRMAN LOCKYER re: 

Present Job Status 65 

Length of Application Process 65 


MR. ALARCON to Review Standards 

regarding Color Blind Applications 65 

Questions by CHAIRMAN LOCKYER re: 

Most Difficult Decision 66 

Questions by SENATOR LEWIS re: 

Recent Dramatic Increase in Percentage 

of Minority Promotions in Department 67 

Questions by CHAIRMAN LOCKYER re: 

Ethnic Breakdown of Promotions and 

Hires within Department 67 

Percentage of African-American 

Promotions 69 

Questions by SENATOR LEWIS re: 

Percentage of African-American Employees 

and Promotions 70 

Questions by SENATOR HUGHES re: 

Under Representation of Hispanic in 

Educational Services Branches of 

Department 71 

Educational Requirements 72 


statements by CHAIRMAN LOCKYER re: 

General Feeling of Concern and 

Disquiet in Youth Authority 74 

Motion to Confirm 74 

Committee Action 75 


California State University 75 

Introduction and Support 


Introduction and Support 


Background and Experience 78 

Questions by CHAIRMAN LOCKYER re: 

Philosophy on Student Fees 80 

Controversies on Affirmative 

Action Policies 81 

Questions by SENATOR HUGHES re: 

Role of CSU in Interacting with Schools 

to Upgrade Educational Quality 82 

CSU Working with Superintendent of Public 
Instruction to Reduce Need for Remedial 
Education 82 

Number of Campuses Allowing High 

School Students to Take Courses 83 

Motion to Confirm . 83 

Committee Action 83 


State Board of Education 83 

Motion to Confirm 84 

Committee Action 84 

KEITH P. BISHOP, Commissioner 

Department of Corporations - 84 

Background and Experience 84 


statements of Concern by 


Questions by SENATOR ROSENTHAL re: 

Belief that Legislature Need Not Have 

Concerns about How HMOs Treat Patients 87 

Department • s Ombudsperson Program 88 

Need for Consumer Advocate in Department 91 

Questions by CHAIRMAN LOCKYER re: 

Adjudication vs. Advocates for Consumers 91 

Care about Consumers 92 

Questions by SENATOR ROSENTHAL re: 

Enforcement Policy regarding 

Individual Complaints against HMOs 93 

Imposition of Penalties against HMOs 

in Individual Complaints 94 

Commitment to Fully Revive the DOC 

Quality of Care Initiative 95 

Administration's Position that SB 406, 

Which Removes HMOs from DOC Jurisdiction 

and into Department of Consumer Affairs, 

Should Have Fast-track Review by HMO 

Task Force 96 

Questions by CHAIRMAN LOCKYER re: 

HMO Task Force Review of Jurisdictional 

Issue 97 

Need for Quick Action on Governance 

Decision by Task Force 97 

Letter from DOC regarding Senate 

Committee Jurisdictions 98 

Questions by SENATOR ROSENTHAL re: 

HMO Mergers and Anti-trust Issues 100 

Questions by SENATOR LEWIS re: 

Role of Commissioner in HMO Mergers 101 

Complaints against Western Dental 102 


Penalties against Western Dental 102 

Nature of Deficiencies regarding 

Western Dental 103 

Questions by SENATOR AYALA re: 

Record of Enforcement and Penalties 

against HMO Providers 104 

Average Tenure of Commissioners 105 

Questions by SENATOR LEWIS re: 

Success with Backlog of Consumer 

Complaints 105 

Accommodation of Patients Who Desire 

Dental Work on Four Quadrants 

Simultaneously 107 

Witness in Support: 


California Medical Association 107 

Witnesses in Opposition: 


Consumers for Quality Care 110 

Questions by CHAIRMAN LOCKYER re: 

Audit of Kaiser 117 

Request that MR. HAGEN 

Recuse Himself 119 

DOC's Contract with Institute 

for Medical Quality 121 

Systemic Problem within DOC, not 

Lack of Competence 122 

Rebuttal by MR. BISHOP re: 

Action on Consumer Complaints 123 

Questions by CHAIRMAN LOCKYER re: 

Kaiser Audit by DOC 124 

Kaiser ' s Grievance Process 125 

Principal Responsibilities of 

MR. HAGEN, Assistant Commissioner 125 

Subcontractors JCHO and IMQ 126 

Adequacy of Staff Exertise within 

Department for Reviews 127 

Contracting Out for Expertise 128 

Further Rebuttal by MR. BISHOP re: 

Christie Case 128 

Questions by CHAIRMAN LOCKYER re: 

Proposed Budget Cut of 47 Positions, 

$3 . 6 Million 129 

Document Imaging Program 130 

Witnesses in Opposition: 

HAROLD OWENS, President 

Health Access of California 131 

Questions by CHAIRMAN LOCKYER re: 

Whose Responsibility Is It 132 

Questions by SENATOR BRULTE re: 

Position on Outlawing HMOs 13 3 


Service Employees International Union 134 

Questions of MR. BISHOP by 

Possible Closure of Many Kaiser 
Facilities 134 

When Kaiser Must Get DOC 

Approval for Structural Changes 135 

Questions by SENATOR BRULTE re: 

Request by SEIU for DOC to Hold 

Public Hearings on Kaiser 136 

Filing of Notice of Material 

Modification with Department 138 

Policy on Public Hearings 138 


Questions by CHAIRMAN LOCKYER re: 

Authority of DOC to Hold Public 

Hearings on Closures 138 

Number of HMO Material Change Notices 139 

Number of Public Hearings on Material 

Change Notices 139 

Resumption of Testimony by MS. CAPELL 140 

Questions by CHAIRMAN LOCKYER re: 

Purpose of Contracts 142 

Questions of MS. CAPELL by SENATOR BRULTE re: 

Growing Concern over Abuses by HMOs 14 3 

Slowness of Agency in Reacting to 

HMO Abuses 143 

Witnesses in Opposition; 

CARLA WOODWORTH, Executive Director 

California Physicians Alliance 145 

Statements by CHAIRMAN LOCKYER re: 

DOC'S Failure to Contact MARK HEBLER 

regarding HMO Regulation 146 

CHARLA COOPER, Complainant 148 

Questions by CHAIRMAN LOCKYER re: 

Position in Department of 


Number of Urgent Complaints 

Received by DOC 151 

Letters of Complaint 152 

Questions of MR. BISHOP by CHAIRMAN LOCKYER re: 

Referral of Cooper Complaint to 

Enforcement Division 153 

Questions of MS. COOPER by SENATOR BRULTE re: 

Final Action Requested on Complaint 154 


Questions of MR. BISHOP by SENATOR BRULTE re: 

Possible Range of Action against Kaiser 156 

Questions by CHAIRMAN LOCKYER re: 

Conclusion of Review of Cooper Complaint 

by Enforcement Division 156 

Closure of Cooper File 157 

Need for DOC to be More Explicit about 
Enforcement Possibilities 158 

Questions of MS. COOPER by SENATOR HUGHES re: 

Duration of Complaint Process 159 

Questions of MS. COOPER by SENATOR BRULTE re: 

DOC'S Increase in Medical Reviewers 160 

Request by CHAIRMAN LOCKYER for Number of 

Urgent Complaints Received by DOC . . . ; 160 

Questions by SENATOR BRULTE re: 

Complaint Backlog 160 

Witness in Opposition: 

JO GODFREY , Complainant 161 

Questions by CHAIRMAN LOCKYER re: 

Name of HMO Provider 164 

Referral of Case to Enforcement 

Division of DOC 164 

Questions of MR. BISHOP by CHAIRMAN LOCKYER re: 

Familiarity with Godfrey Complaint 165 

Questions by SENATOR BRULTE re: 

Requirement that Attorney General Must Get 
Permission from DOC to Prosecute HMOs 166 

DOC's Complain Form which Refuses to 

Investigate Claims Where Legal Actions Have 

Been Filed 166 


Questions by CHAIRMAN LOCKYER re: 

DOC ' s Current Complaint Form 166 

witness in Support: 


American Medical Group Association 167 

Questions by SENATOR BRULTE re: 

Direction of DOC's Enforcement and 
Administrative Process 168 

Questions by CHAIRMAN LOCKYER re: 

Request to Finance by DOC for 

Enforcement Budget Augmentation 169 

Complaint Form 170 

Questions by SENATOR HUGHES re: 

How Often Department Changes Complaint 

Forms 171 

Conceivability that Same Complaint Form 

May Be in Use Today 172 

Dating and Revising Forms 172 

Questions by CHAIRMAN LOCKYER re: 

Accessibility of Documents to Complainants . . . 173 
Questions by SENATOR BRULTE re: 

Confidentiality Issue 173 

Statements by CHAIRMAN LOCKYER re: 

Decision to Hold Confirmation for 

One Week in Committee before Vote 174 

Termination of Proceedings 175 

Certificate of Reporter 176 

— ooOoo — 

CHAIRMAN LOCKYER: We'll start with Mr. Alarcon 

Good afternoon, sir. Mr. Alarcon, at the last 
meeting, mostly we just heard testimony from people that had 
opinions to express either for or opposed to confirmation. 

Perhaps you'd like to start today with any 
general comment that you may want to make to begin 
considerations, and then if there are any specific issues that 
you'd care to respond to, we'll give you an opportunity to do 

MR. ALARCON: Thank you, Mr. Chairman, and 
Senators, and staff. 

First let me say, I'm very honored. It's a 
privilege, really, to be here before you, and I feel like a very 
fortunate individual as well. 

I'm really the product of two high school 
drop-outs who, I'm proud to say, are now celebrating their fifth 
decade of marriage. I have a very strong, supportive family. 

I work for a department whose mission I feel 
passionately about, and whose people that work in that 
department, I believe, are some of the best public servants, not 
only in this state but around the country. 

Public service is my career. I didn't back into 
it. From the time I was a youngster, I wanted to be in 
government; I wanted to work for the public. 

Youth services has also been in my life, all my 

life. My adult life, I've been involved in everything from 
coaching kids, to being a child mental health advocate, to 
helping to establish a child sexual abuse treatment center. 

So, when I got the opportunity some 16 years ago 
to come to the California Youth Authority and combine my career 
of public service with youth services, I felt like I'd gone to 
heaven. I had three public service internships before that, and 
I worked at four different state departments. 

Then again, 16 years ago, I became the Deputy 
Director for administrative services at the California Youth 
Authority. There I had responsibility for the various support 
functions, including the budget, for the Youth Authority. 

After that, I was promoted to Chief Deputy 
Director, appointed Chief Deputy Director, and served in that 
position for over nine years. During that period of time, 
several occasions, was the acting Director during charges in 

In total, I've worked for six different Directors 
and three different Governors. A year ago, just about a year 
ago, I was appointed Director by Governor Pete Wilson. 

When I was first appointed, Mr. Chairman and 
Senators, I began by issuing an agenda to all my staff and to 
people outside the organization who worked with us on a regular 
basis. I identified six areas that I believe California and the 
California Youth Authority should be the national leaders. 

Specifically, I talked about being a national 
leader in handling of violent offenders, in correctional 
education, in restorative justice, in transitioning offenders to 

the community, and public and staff safety, and in advocating 
for prevention. And I got overwhelming positive response, both 
inside the department and outside, for that agenda. And we have 
worked hard to develop a number of activities and objectives, 
all geared to those six critical areas that I believe, again, 
California should be national leaders in. 

Things are going great. Three months after I was 
appointed, the worst possible thing happened. We lost a family 
member. Youth Counselor Ineasie Baker was murdered in the Heman 
G. Stark Youth Training School. 

While I won't say that that changed everything, 
it certainly changed a lot. It made us all very much aware that 
we had to double, triple, quadruple our efforts as it pertained 
to safety in the organization. We've been working very hard to 
do that, to shore up our policies and procedures, to standardize 
our practices, and to make everybody aware on a daily basis that 
they have to make safety their first priority in order for us to 
carry out rest of our mission, protect the public, and to try to 
change the most difficult youthful offenders that are committed 
to us . 

I've also had to make some very difficult 
decisions during that period of time. And while you heard from 
many supporters at the last hearing, I know you received a 
number of letters, people inside and outside the department, 
national and statewide, you also heard from an individual who 
identified himself as a disgruntled employee. And he had a list 
of issues. 

Mr. Chairman and Senators, I prepared responses 

to all those issues. They were submitted in writing to your 
staff/ and I believe that you have received those. I would ask 
that those be accepted as my official response to those various 
issues . 

I really would like to say that I think there's 
room for disagreement. I've always been known as an 
administrator who didn't want to surround himself with yes 
people, and I have very -- many different points of view that 
are presented to me on a regular basis, and they have always 
been. And I think that's healthy for the organization. 

I appreciate this process, and what staff and all 
of you have gone through in reviewing my qualifications. And 
I'll be happy to respond to any questions that any of you have. 

CHAIRMAN LOCKYER: Let me ask first. Members, if 
there's any of the specific issues that were discussed at our 
previous hearing that you'd rather have some specific oral 
response from the Director? We do have a written commentary, 
but if there are any of those matters that Members wanted to 
comment on, let me open that up, plus any other general matters 
if there's any topics. 

I guess I'll start in that general way, 
Mr. Alarcon, and that would be to ask for the thoughts and 
recommendations that have derived from the unfortunate incident, 
the killing. And then there were a lot of changes suggested 
subsequent to that, CDC's role as an auditor in what changes of 
that sort, and then maybe with respect to the general policy of 
juvenile justice. It's my understanding you have a task force 
that's been working on preparing some thoughts and 

recommendations to us in that way. 

So, with respect to each of those, if you'd just 
help us understand, first, what actual changes are contemplated 
or have been made because of the counselor's death. 

MR. ALARCON: Great, I'll start with that. 
There were three different processes that we 
initiated. First was a special incident review. This was 
started last September. The murder occurred in August. 

We were allowed to begin our incident review in 
September, and we were careful not to get ourselves involved in 
a criminal investigation which was taking place at the same 

In that special incident review, a five-person 
team went back and re-established the various • events that led up 
to the murder, and events subsequent to the murder up until 
Ms. Baker's body was found. 

And that review generated two additional 
processes. One was series of Internal Affairs investigations. 
Two of those investigations have led to the dismissal of two 
employees. Other investigations are still continuing, and we're 
still working very closely with the District Attorney and the 
local PD. 

The other part of that first initial review 
generated was a major operations review. There were some things 
that we found that occurred around the events surrounding the 
death, not the murder itself, but other events occurring that 
suggested there were policies and procedures that were not being 
followed or appeared to be inappropriate. And I wanted to know 

whether those were problems just at that particular living unit 
where this incident occurred, or whether it was indication of 
entire institution that may have serious problems. 

So, I established an eleven-person team. Almost 
half of that team were retired annuitants, many years in the 
business. It included an associate warden from CDC. It 
included a member of the District Attorney's office. And they 
spent five weeks basically living at that institution. Four out 
of five days they were there, shadowing every major program in 
that institution, every major administrator. 

They developed a report, submitted the report to 
me, and that report indicated that there were a number of 
problems, and also indicated to me, it was my decision, that we 
needed to make a change in the leadership of that institution. 

This in no way indicates that the individuals 
involved, the changes I made, were bad people, but it was clear 
to me they could no longer lead that particular institution. 
And so, I made some management changes, and I've made several 
other supervisory changes at that facility. 

I'm pleased to say that I think response that 
I've gotten from individual staff members is that we've 
accomplished a lot even with that change. In the brief period 
of time, the new leadership there has already identified some 
serious problems and corrected them, and we're going to continue 
to make improvements in that facility. 

CHAIRMAN LOCKYER: What kind of problems? What's 
the most serious problem you've found? 

MR. ALARCON: Well, I'll start with the most 

basic one, and that's attitude about safety, complacency. And 
it's one of the most dangerous things that can happen in our 
business, is to get complacent. And at times we tend to do such 
a good job, or we get used to, maybe, changing our behavior just 
slightly, and we see we get away with it, and we practice it 
over and over again, becomes habit, that's you get yourself in 

And there things like that at this facility. 
Like, too many staff not wearing their personal alarms, as an 

I made several visits down there. One of the 
visits I made, I walked down the trade corridor there, and I was 
finding pieces of metal, wire, in places where they shouldn't 
be. That's not a sign of an institution that's taking care of 
business as far as safety is concerned. 

I saw a youthful offender driving a forklift. I 
looked around, and I could not find somebody that had their eyes 
watching that youthful offender. That concerned me. 

I randomly visited some individual rooms, and I 
found rooms that did not meet Department and that institution's 
standards. So, things were not looking good. 

CHAIRMAN LOCKYER: With respect to what? Which 
standards were not in compliance? 

MR. TUjARCON: Well, for example, I'll just give 
one example. A room that had way too much stuff in it, and we 
had -- the institution had just, half a dozen months before that 
reduced the amount of paraphernalia that could be allowed in a 
room. It was unkept. It was filthy. And, Senator Ayala will 


appreciate this one, there was a large box of Ajax sitting in 
this room after, we had make it very clear that that was not to 
be the case. 

So, you see, I was very concerned about changes 
that needed to be made at that facility, and they're being made 
today. That's sort of the microcosm there. 

There are bigger issues around changing policies 
and procedures, not just at that facility, but statewide, 
including making sure that we have clear check-in, check-out 
procedures at all institutions. Looking at how we might 
increase perimeter security, in particular those places that 
don't have the more secure fences and more up-to-date 
technological devices that we have around the fences. Some are 
older than others. 

We propose in this budget, which we've met with 
fairly good success so far in budget subcommittees, a number of 
measures to further improve safety and security, including the 
addition of canines in Southern California. It's a capacity 
we've had in Northern California. In previous years, when there 
weren't resources available, we were not able to get the support 
to add canines in Southern California. It looks like we're 
getting that today. Senator, both in the Assembly and Senate 

That's a brief example of some of the things 
we've been doing. 

CHAIRMAN LOCKYER: Are there differences between 
these particular oversight activities in management review and 
the assistance that CDC provided to look? 


MR. ALARCON: Good question. We have many 
different reviews taking place. My feeling is that we're a 
public agencies. Even though we're the so-called experts in our 
field, we don't have all the answers, and the more people we 
have from the outside looking at us, the better. 

CHAIRMAN LOCKYER: Were there other things? 

MR. ALARCON: Yes, we had CDC come in and do a 
security audit. And it was done on a pilot basis. We've had a 
security audit process historically, but it's been a self 
audit. And the institutions each year, their chief of security 
is supposed to submit a summary of the results of that audit, 
and identify any deficiencies, and what they're going to do to 
correct it, or what they're asking for in terms of assistance to 
make correction. 

And that process seemed to work fine. But as a 
result of this, and having done this outside audit, I'm 
convinced that self audit isn't good enough. We've got to have 
outsiders come in. And so, we're establishing -- 

CHAIRMAN LOCKYER: Are you trying to expand that? 

MR. ALARCON: Yes, statewide, a minimum of one 
audit for each facility on an annual basis is our goal. 

In addition, I began discussions with the 
American Correctional Association several months ago. In this 
date, we have never been accredited by the national 
organization, for a variety of reasons. And we're now pursuing 
bringing them into our facilities. They look at it from a 
little different perspective. 

In addition, I have a Juvenile Justice 


Commission. In fact, you have a Member appointed to that 
Commission. And they make regular reviews of our facility. 
Now, their emphasis previously was not so much on security; it 
was on other areas. We're now going to incorporate security as 
part of their responsibility as well, so that's another group 
we're going to have come in regularly, taking a look at' what 
we're doing. 

CHAIRMAN LOCKYER: What was an example of 
recommended change that the CDC audit produced? Something that 
comes to mind that was a substantial security issue? 

MR. ALARCON: I'll mention the first thing that 
came to mind. 

They found that our tool control in plant 
operations was less than adequate, so we made corrections 

CHAIRMAN LOCKYER: You made some changes there. 


CHAIRMAN LOCKYER: Now, separate from the 
Juvenile Justice Commission you've served on, along with the 
other district attorneys and so on, do you have your own 
Juvenile Justice Task Force? Or, do our notes on this refer to 
that other body? 

MR. ALARCON: They're probably referring to that 
other body. I do have a commission, again, that's advisory to 
me. They do get into some of those very same issues. 

CHAIRMAN LOCKYER: Overlap with the commentary? 


CHAIRMAN LOCKYER: Other questions from Members? 


Senator Ayala. 

SENATOR AYALA: Yes, Mr. Chairman. 

As Mr. Alarcon knows, I've been involved with 
this problem of the juvenile justice program for a number of 
years. I first got involved when Mr. Lyle Eagan was the 
Superintendent at Chino, which was the first one, I think, at 
the time. And I've been involved quite extensively since the 
murder there at YTS . And since the murder, I have visited YTS, 
and I visited Chaderjian, and I visited Preston School. So, I'm 
quite involved with the program. 

One of the reasons is because I have five prisons 
in one school district. Chino School District has five prisons, 
so we're a little bit concerned about the prison system. 

I had some questions typed that I came up with 
since my visits to all these organizations pertaining to the 
Youth Authority. We started with Chaderjian. The 
Superintendent there informed me that they were covering up the 
little windows in the cells, or whatever you call them. 

MR. ALARCON: Living units. 

SENATOR AYALA: Where the wards live and sleep 
most of the time, I guess. 

He said it was because it got too noisy, and they 
could make a lot of racket, and also they could communicate with 
other gang members. 

When did you first discover the windows were 
closed with a little peep-hole that they could look through 
there? What was your first indication of that, that it was 
taking place at Chaderjian? 


MR. ALARCON: First knowledge, it was probably 
couple years after that had been initiated. 

SENATOR AYALA: Did you ever question the 
practice of that? 

MR. ALARCON: Yes, I did. I had similar 
questions, I think, that probably you had when you made your 
visit. The response I got back is that it had dramatic effect 
on the environment of that institution. 

When that institution first opened up, and we 
transferred wards to fill that institution, it was designated 
one to hold the most difficult older offender. Again, when it 
first opened, we had a lot of serious incidents occurring. 
There was a lot of acting out behavior on the part of the 
inmates there. And there were a number of inmates — I say 
inmates because we had the M cases then at that time as well. 

And the institution took it upon itself at that 
time to identify different ways of calming the place down, and 
that was one of the things they incorporated. And it seemed to 
work for them. 

However, in hindsight, there are some — 
obviously some serious concerns about the possibility of keeping 
those flaps on. Other things could possibly happen. 

Staff assured me that they were doing regular 
enough checks that something serious is not likely to happen 
without staff being aware. 

That was an attempt to incorporate a safety item 
in the facility. 

SENATOR AYALA: You did question the practice of 


the Superintendent to take that kind of action on his own? 

MR. ALAR-CON: No. He didn't violate any 
statewide policy or branch policy. 

Again, in hindsight, probably would have been 
preferable had he taken that one up through the chain of 
command, but it didn't violate any policy. 

SENATOR AYALA: But they've taken them down 

MR. ALARCON: Yes, they have. 

SENATOR AYALA: If they were doing such a good 
job, why did you do it? 

MR. ALARCON: Because there were additional 
concerns raised since they were put up. 

SENATOR AYALA: By whom? Who raised the 

MR. ALARCON: Well, some of them were concerns I 
raised. Some were concerns that I heard even from your own 
visits. Some were concerns related to inmate assaults on each 
other that occurred most recently. It was a combination of 
those factors. 

SENATOR AYALA: I raised one of the concerns 
because a ward at that school was murdered in a cell by a fellow 
cell mate there. He was tortured for hours, according to the 
report we have. And he was tortured during the night. He was 
murdered and raped and everything else. 

It wasn't discovered until the next day that, 
that night, that the young fellow had been murdered. 

I just wondered if you had more opening for the 


correctional officers who are on watch to take a look at the 
cells . 

MR. ALARCON: Actually, Senator, it would not 
have made a difference in that case because you can't see into 
the room from the control center. The log showed that -- and 
I'm familiar with the case you're talking about -- the log 
showed that regular checks were made. 

This ward, without getting too much to the 
details of the case, this ward has successfully covered up what 
he was doing. 

SENATOR AYALA: I don't think that was the one 
that caused the murder, because that person wasn't going 
anywhere. Murdering someone in the cell with the cell mate, I 
think he expected to be caught. He wasn't going anywhere. 

I just wondered if he wouldn't have been abused 
like he was if the window hadn't been closed. 

Anyway, they're now down, I understand? 


SENATOR AYALA: Through your order. 

Now, the dead ward's family is now suing is the 

MR. ALARCON: That's correct, and that somewhat 
limits what -- 

SENATOR AYALA: What is the basis of the lawsuit, 
do you know? The basis of the lawsuit by the family of that 
ward that was murdered? 

MR. ALARCON: Well, that might be more 
appropriately answered by my legal counsel. I'm not sure what I 


can really say about that, given that is being litigated. 

SENATOR AYALA: I just wondered how much 
resources the Department was planning to spend to defend this 
case. But you're not aware of that legal matter at all? 

You're saying now that the windows have been 
uncovered. Who made that determination, you or the 

MR. ALARCON: I made it. 

SENATOR AYALA: You made the determination. He 
told me he did it on his own. I wasn't aware that they could 
take that action. 

I can see in an emergency, taking any action 
necessary before getting approval from the Director, but I would 
think the Director would have the final say-so on an action of 
that nature, but apparently they had the authority to do that, 
the superintendents. 

MR. ALARCON: Well, again, I'll just address that 
one specific incident or change that they made. It wasn't 
anything in the policy that said they couldn't do that. Let's 
put it that way. 

SENATOR AYALA: We visited Preston School. I 
toured the facility, and I was very impressed with the boot 
camp. I think that's one of the better things that we are doing 
in our system to get the young people to be so programmed. I 
was impressed with that portion of it. 

But, however, we had a problem there, too, of two 
wards escaping. I was told that the reason for that is because 
the Superintendent had ordered the lights turned off, the 


perimeter and interior at night, after the last ward count, to 
save money, I was told. 

Was that the reason they turned off the lights at 
the perimeter of the prison? 

MR. ALARCON: Senator, you're mentioning 
something that I'm not aware of. 

SENATOR AYALA: You're not aware of that? 

MR. ALARCON: No. When you say that that escape 
was due to turning off the light, I'm sorry, I can't address 

SENATOR AYALA: I was told that last July, during 
the night when the lights were turned off, two wards escaped 
from their cells. They went across the compounds — 

MR. ALARCON: I don't think their escape had 
anything to do with whether there were lights or no lights. 

SENATOR AYALA: That was in the report. I have 
the report. It was a report to you, by the way. 

MR. ALARCON: Again, I don't — 

SENATOR AYALA: I was there last week. I was 
told same thing by the new Superintendent, that that's how these 
people escape, because at the last count, you turn off the 
lights, and that's when they went out. In fact, one of them 
must have been juice ward, as you folks called them, because he 
knew where to go, in the maintenance shop. And he got some wire 
cutters and cut a hole in the fence, about 150 yards from the 
staff main sally port and escaped. 

Now, this is all in the report given to me. 

MR. ALARCON: Without having the report in front 


of me, I can't directly respond. But I recall, because it's 
been a while since that occurred. 

What I remember is that — 

SENATOR AYALA: This was last July. 

MR. ALARCON: — the wards hid behind a certain 
part of the building there. It's difficult, again, for me to go 
into the details without going back to the report. 

SENATOR AYALA: Well, they went directly to the 
maintenance shop — 

MR. ALARCON: But it didn't have anything to do 
with whether the lights were on or not that they got away. 

SENATOR AYALA: I just toured the facility last 
week, and I was told that was the case, and they turned off the 
lights, quote, "to save money." I was a little bit disturbed 
with that statement, because they're supposed to keep those 
people in there at any cost -- 

MR. ALARCON: I understand. 

SENATOR AYALA: — apparently. 

So, you were not aware that they were shutting 
off the lights at Preston to save money when the two wards 
escaped? You're not aware of that? 

MR. ALARCON: I'm aware that institutions take 
various means to reduce their costs, particularly when we get to 
the end of the year, and populations fluctuating. We got to 
stay within budget, and that may be one way that that facility 
was dealing with increased costs. 

SENATOR AYALA: Was anyone at the Sacramento 
Headquarters aware or had approved the lights going out at night 


at that institution? 

MR. ALARCON: I don't know, Senator. 

SENATOR AYALA: You don't know that. 


SENATOR AYALA: According to the staff letter 
that I received, the Department actually took adverse actions, 
not against the Superintendent, but against the security officer 
that went to check on the fence alarm that went off that night, 
in the dark, with his own personal flashlight. 

The Department demoted the officer. The State 
Personnel Board, however, determined that the Department's 
actions were not justified and have reinstated the officer. 

Were you aware of that? 

MR. ALARCON: No, I was not. Senator. 

I was aware that there was security staff person 
who was on probation at the time that this occurred. And that 
his probationary period was ended. 

SENATOR AYALA: But these actions are not given 
to you for your information? 

MR. ALARCON: No, no, again, I'm aware of that 
particular case. I'm not aware that, as you say, that the State 
Personnel Board has reinstated this individual. That's news to 

SENATOR AYALA: I assume that you did not approve 
the shutting off the lights. Did you in any way reprimand the 
Superintendent for doing so? 

MR. ALARCON: I did not. 

SENATOR AYALA: Where is he now, this gentleman 


who was in charge there? 

MR. ALARCON: Again, without having specific 
information as to when we're talking about, it's hard for me to 
respond, Senator. 

SENATOR AYAIiA: We're talking about Greg Zermeno. 
Where is he now? He was the Superintendent at the time. 

MR. ALARCON: Greg Zermeno is now in the NCYC 
complex. He's the Superintendent of Dewitt Nelson. 

SENATOR AYALA: He's in charge of four facilities 
now; right? 

MR. ALARCON: No, he's in charge of one facility, 
and then he has the support functions, yes. 

SENATOR AYALA: That's not promotion; is it? 

MR. ALARCON: No, it was a lateral transfer. 

I have an informal policy of rotating 
superintendents approximately every five years. Mr. Zermeno fit 
that description. 

SENATOR AYALA: It's come to my attention that 
the Ventura School now, that's my next visit, that a female ward 
was recently raped by another ward at the Ventura School 

MR. ALARCON: I am familiar with that one, yes, 

SENATOR AYALA: The female ward was staying in 
the infirmary for medical treatment. Two other wards — again, 
I have to assume it's the juice ward because you had movement — 
were In the infirmary as janitors, and these wards were working 


Are you aware of that? 

MR. AL7VRC0N: I'm aware that we have taken 
adverse action against an employee who wasn't doing -- 

SENATOR AYALA: Unsupervised. 

MR. ALARCON: — doing their job. 

SENATOR AYALA: How could any school allow wards 
to work unsupervised in an infirmary with sick wards or 
medication around, including drugs? 

MR. ALARCON: Senator, that shouldn't happen. 
Very simply, that should not happen. 

Wards should not be unsupervised. 

SENATOR AYALA: So, what happened to the 
supervisor who was in charge of that officer who was not on the 
job? What happened to the person who has been blamed for the 

MR. ALARCON: The person who was directly 
responsible for not providing appropriate supervision, we have 
taken appropriate action. . 

SENATOR AYALA: Like what? 

MR. ALARCON: It's difficult for me to get into. 
I'm somewhat limited in what I can say in terms of personnel, 
but I can assure you that action was taken. 

SENATOR AYALA: Well, the incident happened 
approximately ten months ago. And has anybody been reprimanded 
from staff for that action? 

MR. ALARCON: Yes, sir. 

SENATOR AYALA: They have been. 

What sort of punishment is the Department seeking 


for this type of an incident? A demotion/ like I hope at 
Preston, where they're in charge, and then they're promoting to 
a four institution facility? I don't understand this sort of 
thing. What's happening to the people at that school, Ventura? 
When this took place, those in charge, were they at all dealt 

MR. ALARCON: Yes, Senator. 

SENATOR AYALA: What's happening to those people 
out there? 

MR. ALARCON: There was an investigation, and 
we've dealt with those individuals appropriately through adverse 

I must say that there was some complications 
here, in that we tried to get the District Attorney to prosecute 
the case, and the District Attorney ultimately made a decision 
that they were not able to prosecute because of lack of 
evidence, and the belief that there was some cooperation between 
the victim and the perpetrator. So, we're somewhat limited in 
what we could do. 

SENATOR AYALA: I saw the report. There were two 
wards at the time, and one didn't see anything. 

MR. ALARCON: Right. 

SENATOR AYALA: Who's responsible for security at 
the Ventura School Infirmary? A Custody officer or a medical 
staff? Which would be the person in charge of security? The 
medical staff or — 

MR. ALARCON: Well, inside the unit, you would 
have hospital aids. There should be a group supervisor security 


on the outside. 

SENATOR AYALA: The Assistant Superintendent at 
Preston School told me that he had been a part of the security 
team that had reviewed the security at YTS after the Baker 
murder. He stated that just prior to being named the Assistant 
Superintendent at Preston, he used to be in charge of the 
security at Nelles School. 

He further stated that in his opinion, YTS did 
not have any major security problems. They dismissed the 
security officer and two of the main officers there, but this 
individual who was one that did some of the investigation claims 
that they had no security problems there. 

Now, this is very confusing to me since YTS, as I 
said earlier, the Superintendent and the Assistant 
Superintendent were both demoted and transferred over the 
incident. In addition, the Department asked for numerous costly 
budget proposals in response to YTS staff murder. 

In your opinion, did YTS have any security 
problems prior to the murder? 

MR. ALARCON: Did they have any security problems 
prior to the murder? Well, again, I'll reiterate some of the 
things that I found, even my own visits, that suggest that 
things had to be a problem before the murder occurred. 

SENATOR AYALA: They had problems? 


SENATOR AYALA: Well, this individual, who was 
part of the team that, I guess, you appointed, claims that there 
were not any major security problems. 


MR. ALARCON: That's a surprise to me, Senator, 
because everybody on that team told me that there were. 

SENATOR AYALA: Now, if keys always keep coming 
up, the keys, you told me that the keys were no longer allowed 
for the officers to take home with them any more? 

MR. ALARCON: What I told you is, I established a 
policy that we're going to get rid of having the need for keys. 
And that is one of topics on main table discussions in our 
bargaining sessions. That's what we're going to accomplish. 
We're going to get rid of keys. 

SENATOR AYALA: At YTS, that has been stopped? 

MR. ALARCON: The taking home of keys, no. 

SENATOR AYALA: I was under the impression that 
you told me — 

MR. ALARCON: No, security staff still have their 

SENATOR AYALA: I know they do it at Preston; I 
know that because they told me they did it. 

MR. ALARCON: In fact. Senator, we have some 
facilities that had the practice of taking home keys for 25 

SENATOR AYALA: The reason that I keep bringing 
that up is because I believe that the Baker member of the 
correctional officers was killed for her keys. I've had 
information that could lead to that. 

Institutional keys could serve as the primary 
motive for wards attacking staff. As such, the Department needs 
to develop a stronger safeguard for accounting for all the keys. 


not taking them home and losing them, and someone can make a 
duplicate and give it to some ward inside. You're just 
jeopardizing the safety of the correctional officers when you do 

MR. ALARCON: Senator, you have made your point 
very, very well. I know you've encouraged me and supported me 
to make that change, and we're working to do that. 

My hope is that by the time we talk come next 
year, you'll know that that's happened. 

SENATOR AYALA: You also told me that the wearing 
of personal alarms had been a mandate, and made clear that you 
wear them at all times; is that correct? 

MR. ALARCON: That's correct. 

SENATOR AYALA: The lady involved hear, the 
victim, was not wearing her alarm belt. 

MR. ALARCON: That's correct. 

SENATOR AYALA: That's one of the reasons you 
think she had the problems? 

MR. ALARCON: That certainly contributed to it, 
yes . 

SENATOR AYALA: That concludes my questioning, 
Mr. Chairman, 

CHAIRMAN LOCKYER: Senators, anything additional? 
Senator Brulte. 

SENATOR BRULTE: I've got a couple questions 
based on the testimony from the previous hearing. 

At the outset, let me say that I understand that 
there are certain jobs in state government that are easier than 


others. Being a Senator is kind of an easy job. And there are 
some that are more difficult. I'm not aware of any that are as 
difficult as job that you and some of your co-workers do. 

MR. ALARCON: Thank you. Senator. 

SENATOR BRULTE: I'd like to ask you a couple of 

First of all/ could you just explain for the 
record what an M case is? 


There was legislation passed back in 1983, it 
became effective in '84. Basically, an M number is a juvenile 
by age who is committed to the adult court by the adult court, 
literally committed to the Department of Corrections, but by 
court order, are housed in the California Youth Authority. 

SENATOR BRULTE: At the last hearing, one of the 
witnesses said that M cases — let me see if I have this 
right — said that last summer, the Governor signed legislation 
requiring that most M numbers held in Youth Authority be 
transferred back to the Department of Corrections. And that 
created security problems within the institutions. 

About how many M cases were there in the entire 

MR. ALARCON: Well, at one time, I think we 
peaked at about 1400 M cases. 

SENATOR BRULTE: Are they a higher security risk 
to prison staff, correction staff, than the regular population? 

MR. ALARCON: Well, from line staff, frankly, you 
get mixed reaction. • Many staff would say that in a lot of 


respects, they are not as risky in this way. If an M number 
misbehaves/ refuses to program/ does anything Inappropriate/ we 
have the authority to immediately ship them to the Department of 
Corrections. SO/ there is incentive for them to behave/ if you 

In fact/ this may sound kind of crazy, but when 
we actually transferred 800 and something of these guys out/ 
there were a number of staff that were sorry to see that happen, 
because these were, in many cases, the inmates that were sort of 
cooperating/ and helping/ and keeping the places clean. That 
may sound crazy/ but that really was part of the reaction. 

On the other hand, they wouldn't be tried in 
adult court unless they committed serious crimes. 

So, yes, I would put them at considerable risk. 

SENATOR BRULTE: The witness claimed that once 
the law was changed that the Governor signed/ the security risk 
was increased. Is that your sense? 

MR. ALARCON: I think that's true for this 
reason. There were lots of radio reports/ and inmates and wards 
were picking up that this bill had actually passed and signed/ 
and they started asking questions/ and there waS/ I think/ some 
heightened anxiety. SO/ yes, I would agree. 

SENATOR BRULTE: In your response that I received 
this morning -- I don't know, it's marked confidential — you 
said that the dealing with the M cases was consistent with what 
had been previous policy, and that the witness was wrong. The 
law change didn't affect that. Let me see if I can quote you 



"This bill in fact does not specifically address 
those inmates already housed in Youth Authority facilities. 
During the legislative process and in the Governor's budget, it 
was always the plan that inmates already housed in the 
Department would be transferred to CDC under normal process." 

MR. ALARCON: Yes, let me clarify that. Senator. 

The M case transfer, the proposal was my 
proposal. I mean, I had pursued it. And at one time it was in 
trailer bill language in the budget. It didn't make it for a 
variety of reasons, which you don't need to go into. 

But our budget made the assumption that it was 
going to pass, and that we would no longer accept M cases 
beginning January first. And that budget assumption assumed no 
longer getting any inmates January first, and that any existing 
M numbers that we already had in the system would attrid. out 
under normal procedure. Which, historically, we washed out 
about 40 percent of M numbers on an annual basis. 

And so, a matter of a couple of years, those who 
were already in the system, already sent to us courts, where the 
deals, if you will, were struck with all the parties in the 
justice system, they would trid out over a period of time. 

That was the original assumption, that was all 
the planning that went into this. 

SENATOR BRULTE: You believe they were a higher 
security risk, but there no higher security maintenance of them; 
is that correct? 

MR. ALARCON: Again, once the bill did pass, and 
this increase in anxiety occurred, within a matter of days is 


when we instructed all the institutions. There was a meeting 
involving most of the superintendents involved who had M cases. 

They were instructed to sequester M numbers to 
their living units. In other words, not let them program 
outside of their living units, not go to school, not go to other 
outside activities they might be involved in for that very 

Prior to that time, as I say, it was, depending 
on who you talked to, a lot of staff would tell you they weren't 
as high a risk, but I think the potential was there. 

SENATOR BRULTE: So, prior to the passage of the 
legislation that the witness talked about, there wasn't a higher 
security for those M numbers? 

MR. ALARCON: No, it varies, really, by 
individual. In other words, we had probably our largest number 
-- not probably, I know we had our largest number of M cases at 
YTS . And there's a reason for that, because YTS has single 
cells. In my system, unfortunately, I have a lot of beds that 
were built back in the '50s and '60s, or even before that, that 
are dormitory. And we try to avoid putting M numbers in 
dormitory settings. 

On the other hand, there are some M numbers that 
have demonstrated that they are capable of making change. 
They've taken advantage of the services the Youth Authority has 
offered. In other words, they've met the conditions, the reason 
why, maybe, the judge said, "Let's put them into YA, " and they 
ended up being some of our best camp people. I mean, they 
perform forestry work, in obviously the least secure setting 


that we have, so it's really a mixed bag. 

SENATOR BRULTE: My question I'm trying to get to 
is, the witness said that M cases weren't locked down prior to 
the legislation passing. The legislation was signed by the 

In your response, you say that the witness was 
mistaken in his belief that required M numbers to be transferred 
back to CDC. In fact, it doesn't even specifically address 
those inmates. You had anticipated the process, and you 
intended to deal with them under normal conditions? 

MR. ALARCON: Correct. 

SENATOR BRULTE: Then what occurred to change 
that, because you then say you had a meeting with affected 
supervisors within the Department, and you developed alternative 

MR. ALARCON: A number of things changed that. 
Again, one was the immediate anxiety, that feedback that we were 
getting that, hey, people where concerned out there, wondering 
what's going on. 

Second, our population at that time was going 
skyrocketing. We had already started the process of looking 
at — we had run out of space. We haven't gotten any new 
capacity in some time. Senator. And we were already looking at 
the possibility of filling gyms and programs areas like CDC has 
had to do. When we start doing that, we erode the mission of 
the Youth Authority. We're no longer running a Youth Authority 
facility; we're running something else. 

All those things combined, the overcrowding. 


anxiety that existed, the belief on the part of our agency as 
well that we ought to be looking at alternatives. That got us 
to looking at potentially moving existing M numbers, which, 
under existing criteria, existing regulations, I had authority 
to make some decisions on. 

SENATOR BRULTE: Did you get a surprise estimate 
in your growth? 

MR. ALARCON: What's that? 

SENATOR BRULTE: Did you get a surprise estimate 
in your growth? I mean the growth numbers for the Department 
had been published long before. 

MR. ALARCON: That's correct. Senator. For a 
number of years, I've been trying to get increased capacity, and 
I haven't been successful. We have been forced to crowd. We 
basically double celled every single room that was available, 
and we filled dormitories to their maximum. 

SENATOR BRULTE: Is it safe to say that the 
Department didn't anticipate the anxiety level increase that 
might have come about from legislation? 

The witness suggested that staff and inmates were 
hearing over the radio about action in Sacramento. You, 
yourself, both in the record and here have now said that you 
reacted to that and changed the policy. 

Why didn't the agency anticipate that as a 
potential problem? 

MR. ALARCON: Well, because all along, we thought 
it was clear what our plan was. 

The witness suggested that there wasn't any 


planning that took place in advance, and that just wasn't the 
case. We had a plan, and it was the one that I described to 

But we had to make changes. We had to make 
changes to that plan. Situation had changed/ and it was 
necessary for us to make some quick decisions about adjusting 
our population. 

SENATOR BRULTE: I don't think the witness said 
you didn't have a plan. I think the witness said you did have a 
plan. I think he said you had your plan, and it was the wrong 

MR. ALARCON: No, sir, that's not what I recall 
from one of his letters that he wrote, and I believe that was 
the letter he passed out at the last hearing. 

SENATOR BRULTE: I'm reading the record. 

MR. ALARCON: You're probably looking at a 

SENATOR BRULTE: Another one, the YTS murder 
incident review report, a witness claimed that the incident 
review focused primarily on logistics and chronology and how the 
incident occurred, and that very few management issues were 

This is your response. You cited the page of the 
transcript. And you said that the review team was limited in 
their review, primarily because you didn't want to get in the 
way of an ongoing criminal investigation by the Chino Police 

MR. ALARCON: Yes, that special incident review 


was not an investigation. It was to establish the events and 
the timeframes of those events that occurred before and after 
the murder until body was found. 

An example, the many interviews that were 
conducted by that incident review did not include Larberger 
rights or peace officer rights. 

This was strictly to establish the timeframes, 
which, by the way, provided some additional help ultimately to 
the criminal investigation. 

It was never intended to be anything more than 

SENATOR BRULTE: I'm confused as to what point 
you're making here. 

The witness — 

MR. ALARCON: My suggestion is that this incident 
review didn't go beyond establishing what I just told you we 
tried to establish, and that was timeframes and sequence of 
events that occurred before and after the murder. That's 
exactly what that incident review was supposed to do. 

SENATOR BRULTE: Which is what the witness 
claimed is all it did. 

MR. ALARCON: Correct. 

SENATOR BRULTE: The witness claimed that all 
that did was deal with logistics and the chronology. 

MR. ALARCON: And I guess I'm agreeing with the 
witness. That's what they were supposed to do. 

SENATOR BRULTE: But in your written response, 
you didn't agree with the witness. In your written response you 


said that/ let me quote exactly, and correct me if I'm wrong. I 
just want to find out what's here. 

"The review team was sent to the Youth Training 
School by the Director, was asked to review the chronology 
surrounding the incident." I'll paraphrase here. 

The scope of the review team was limited due to 
the fact that the Director's office did not want the review team 
to do anything that would interfere or jeopardize with the 
ongoing criminal investigation. 

MR. ALARCON: And the witness is critical of 
that/ thinking that we should have looked at other things 
besides that assignment. 

SENATOR BRULTE: But the reason you limited that 
was because you didn't want to get into the way of an 

MR. ALARCON: The criminal investigation was 
still under way. 

SENATOR BRULTE: When the criminal investigation 
was completed/ did you expand the scope of the review? 

MR. ALARCON: When the criminal investigation was 
completed/ I think the DA might argue that it still hasn't been 
completed/ but I did the more comprehensive operations review 
that I described earlier. 

SENATOR BRULTE: What did you find? 

MR. ALARCON: I found a lot of ongoing problems 
at the facility, from communication/ to poor practices, to lack 
of tool control/ to failure to have a check-in/ check-out 
system. There were a number of issues that we found in that 



SENATOR BRULTE: What's the check-in, check-out 

MR. ALARCON: That's a way of assuring that at 
all times we know what staff are within the facility and what 
staff have left the facility. 

SENATOR BRULTE: Give me an example how you do 
that. You come in in the morning, and I can look around — 

MR. ALARCON: Sure. One of the simplest ways is, 
an employee walks into whatever entrance has been designated. 
Sometimes it's the sally port, sometimes it's the administration 
building. And there's an accountability board. They may have 
an ID, or they may have brass tag that has their name and their 
number on it. 

They move that brass tag or that ID to where 
they're going to be that day, and they usually have the picture 
or their name facing out so that everybody knows that that 
person is here, and they're at Unit One. 

When they leave at the end of their shift, they 
remove that tag or that ID, and they turn it over so their 
picture's no longer showing, or the name's no longer showing, 
and they put it back in some other area on the board so, it's 
clear that they've left the facility. 

That's one way that you can keep regular check as 
to who's there and who's not. 

SENATOR BRULTE: Back to the previous hearing, 
the claim was made that seven of your eleven superintendents, 
ail of whom have been appointed during your watch, or by your 


decision or strong recommendation, have little or no security 
knowledge or experience. 

You went on in your written response to say that 
eleven of these superintendents have over 20 years with the 

MR. ALARCON: That's correct. 

SENATOR BRULTE: The average is over 24; six 
started their Youth Authority careers as entry level peace 

MR. ALARCON: Correct. 

SENATOR BRULTE: Ten superintendents held 
positions of supervisory peace officers, and all have held 
management peace officer positions during their careers. 

MR. ALARCON: That's correct, Senator. 

SENATOR BRULTE: How many of those positions have 
you ever held? 

MR. ALARCON: Have I ever held? I never held any 
of them. 

As I mentioned in my summation or my opening 
comments, I started here as the Deputy Director for 
administration 16 years ago. 

SENATOR BRULTE: Have you ever attended the basic 
peace officer academy? 

MR. ALARCON: I have attended courses over a 
period of years. I probably by now have attended most of the 
classes . 

I am weapons qualified, and I've taken the PCA 32 


SENATOR BRULTE: One of the witnesses claimed 
that the security audits were conducted only by mail. These 
were self audits? 

MR. ALARCON: That's correct. I mentioned that 
earlier, Senator. 

SENATOR BRULTE: Any institution ever fail one of 
those self audits in the time you've been with the agency? 

MR. ALARCON: Not failure, but I think some 
institutions did a better job than others of identifying 
weaknesses and describing what they were going to do to correct 

SENATOR BRULTE: You've now instituted a system 
where there are no longer self audits? 

MR. ALARCON: Correct, Yes. 

SENATOR BRULTE: How many of those have been 

MR. ALARCON: We've only accomplished one 
institution. That was our pilot institution. We used that to 
develop a protocol that will be used throughout the state. 

SENATOR BRULTE: What institution was that? 

MR. ALARCON: The N.A. Chaderjian School in 

SENATOR BRULTE: How did they do? 

MR. ALARCON: On grades A Through F, I'd say they 
had maybe a C+, B- . 

SENATOR BRULTE: How did they grade themselves 
last year when they did their own? 

MR. ALARCON: I think probably above average. I'd 


have to go back and compare it again, but I think they probably 
saw themselves as above average. 

SENATOR BRULTE: Would the average person, if 
they looked at those two reports, suggest that there were 
discrepancies between the two reports? 

MR. ALARCON: Large ones, no. There wasn't 
anything — and it's too bad we don't have someone here from 
that audit team from CDC here — but there wasn't anything there 
that they would describe as very serious. It was mostly fine 
tuning improvements . 

SENATOR BRULTE: Are you glad there aren't any M 
cases in CYA today? 

MR. ALARCON: Yes, Senator, except I can't say 
there aren't any. We have a group that will still continue to 
be sent to us, and that's the age 14 and 15 year olds, and 
those under 18 who can complete their time by age 21. The law 
didn't eliminate all M numbers. We have about 300 still in our 
system, and we expect that that will probably level out at about 

But, yes, I am. 

SENATOR BRULTE: Are there any special security 
requirements today for them? 

MR. ALARCON: No, there are not. 

SENATOR BRULTE: Were there at any period in the 
last year-and-a-half ? 

MR. ALARCON: Special requirements, we did a 
series of training back in the late '80s and early '90s, and 
developed a manual specifically for the handling of M cases. 


both in the institutions and on parole. Much of it was 
procedural type of matters, you know, how to handle -- because 
we're talking about different laws and different codes on 
discipline, procedures, time adds or reductions, that kind of 
thing, because they're doing determinate sentences, and our 
juveniles are doing indeterminate sentences. 

But beyond that, no. There is nothing in the 
statute. We talked about this when we first got M numbers back 
in 1984, nothing in the statute that really basically allowed us 
to treat them any differently, so we didn't. 

SENATOR BRULTE: Let's go back to YTS and the 
murder that occurred there. 

The leadership of that institution was brought in 
by whom? 

MR. ALARCON: By Craig Brown and myself. Craig 
was the Director, and I was the Chief Deputy. 

SENATOR BRULTE: Why did you bring them in? 

MR. ALARCON: The previous Superintendent 
retired, and the other Superintendent, the Assistant 
Superintendent, was moved to another assignment. 

SENATOR BRULTE: Was YTS a model institution when 
you brought them in, or was it a troubled institution? 

MR. ALARCON: I think there were already signs 
that there was trouble. 

SENATOR BRULTE: And you brought the — 

MR. ALARCON: I don't think, I know there was. 

SENATOR BRULTE: You brought the Superintendent 
and Assistant Superintendent in because they were below average. 


above average, average? Why did you bring them in? 

MR. ALARCON: Well, Mr. VanderWeide, I guess I 
can use his name, spent 24 of his 29 years at the Youth Training 
School, and had expressed previously a dream to some day finish 
his career as a Superintendent there. And he was at the Fred C. 
Nelles School at the time, and the opening came up. 

I'll tell you honestly, it's been very difficult 
to get our managers to go to Southern California and take 
assignments as the superintendents and assistants at those 

Miss Adrian Shaw was willing to go to Southern 
California and take the assistant job. At the time, we thought 
they would make a good team. Van having had numerous years 
knowing that institution. And Adrian had recently been a 
superintendent in Northern California, smaller institution, but 
a lot of her background was in labor relations. And we knew 
that was an area that we really needed some strength in at that 
facility. So, at the time we thought the two would make a good 

SENATOR BRULTE: Why did you think that that was 
essential for that institution? 

MR. ALARCON: It is so large. It's larger than 
any other facility. I mean, there's no other facility 
compares. So, there are a lot more employees, obviously, and 
just a lot more activity. 

One of the reasons why we made a change at the 
Assistant Superintendent previously was because we needed 
somebody who had more labor relations experience. 


SENATOR BRULTE: Unfortunately, we had a murder 
at that institution. 

MR. ALARCON: Yes, we did. Senator. 

SENATOR BRULTE: What did you do with the 
Superintendent and the Deputy Superintendent? What is it. 
Assistant Superintendent? 

MR. ALARCON: Assistant Superintendent, yeah. 

SENATOR BRULTE: What did you with those two 



MR. ALARCON: You mean immediately after the 


MR. ALARCON: Tried to provide them all the 
support we could. 

I think what you're leading to is what ultimately 
did I do. And 15 months after they arrived there, I terminated 
the Career Executive Assignment of the Superintendent, He 
returned to the highest civil service level in the Department 
and is now assigned as an administrator for Educational Services 
in Southern California. 

The Assistant Superintendent I lateralled back to 
Northern California, and she is now working at Northern 
Reception Center Clinic here in Sacramento. 

SENATOR BRULTE: Is a move from a Career 
Executive Service to the highest level of civil service, would 
the average person take that as a demotion? 

MR. ALARCON: Yes, yes. Career Executive 
Assignments serve at • the pleasure of the appointing power, the 


Director. And I have 65 positions out of 5400 in the Department 
that are designated managerial, and probably half of those are 
CEAs, Career Executive Assignments, mostly the superintendents, 
assistant superintendents, deputy directors. That's pretty much 

SENATOR BRULTE: So, you took the Superintendent 
and demoted the Superintendent? 

MR. ALARCON: I terminated his CEA, yes. 

SENATOR BRULTE: And you took the Assistant 
Superintendent and — 

MR. ALARCON: Laterally transferred her to 
Northern California. 

SENATOR BRULTE: Why didn't you demote her? 

MR. ALARCON: Well, this gets into personnel 
matters that I think there's probably some privacy issues we're 
getting into, but the circumstances were different. 

SENATOR BRULTE: Without going into privacy 
issues, what were the circumstances, other than one was a 
Superintendent and the other was the Assistant Superintendent? 

MR. ALARCON: One lateralled to that facility 
from being a Superintendent to an Assistant had no prior 
experience at that facility, and had much less experience 
working in facility, period. 

I saw that situation different than someone who 
had worked virtually their entire career in the facilities, and 
90 percent of it at that facility. 

There was also a difference in reaction to what I 
had to share with them about the findings of our operation 


review. In one case, I had found someone accepting that. Many 
of the things that we talked about, in fact/ were issues. 

SENATOR BRULTE: What operations review is that? 

MR. ALARCON: This was the eleven-person review 
that spent five weeks at the facility. 

SENATOR BRULTE: That was different from the 
incident review? 

MR. ALARCON: That was different from the 
incident review, yes. 

Anyway, the circumstances were different, without 
getting too much personnel. 

SENATOR BRULTE: The operations review led to a 
number of changes? 

MR. ALARCON: Yes, sir. 

SENATOR BRULTE: Were any of those changes 
instituted system wide? 

MR. ALARCON: I'd have to stop and think, go 
through the different areas. 

Well, keep in mind that at the same time, 
actually before we even completed the operation review, we had 
been doing a review of a number of different areas. In fact. 
Senator Ayala was very active in asking questions about some of 
these areas of all our facilities. 

In other words, we did, for example, review of 
what are the check-in, check-out policies right now and 
practices at all of the facilities, and did they still meet the 
standards that are identified in our manual. 

So, yeah, there were changes that I would say 


were in part become statewide changes. We learned a lot from 
this review. 

SENATOR BRULTE: Ten percent, twenty percent, 
fifty percent? Of the changes you instituted at YTS, how many 
of them, what percentage of those were instituted system wide? 

MR. ALARCON: Well, some of them were merely 
re-emphasizing what already was policy but wasn't being 
practiced very well. Like, I reissued a memo to all staff about 
wearing their personal alarms. Clearly, something that wasn't 
going on in a regular basis at YTS. 

I had no knowledge that there was severe 
violations of that going on at other places, but I wasn't going 
to wait for somebody to tell me that. So, we reissued that 
memo . 

Another issue, if I might just mention is, it's 
always been understood practice that you don't go into a room 
alone with an offender. Again, we reissued that, reminded 
people, and told our supervisors they need to hold people 
accountable if they violate that policy for their own protection 
and safety. 

SENATOR BRULTE: Having looked at the review and 
instituting that, is it your — and this is clearly 
speculative — but is it your belief that had those been 
instituted prior to the murder taking place, the murder wouldn't 
have taken place? 

MR. ALARCON: It really is speculation. Senator, 
but I believe that the changes of that having occurred would 
have been less, let*s put it that way. 


SENATOR BRULTE: How do you draw that conclusion? 
Share with me your thought process. 

MR. ALARCON: Let me just give you one example, 
because again, I've got to be careful not to get too much in 

And please, my legal counsel, wave your hand if I 
get in trouble. 

One example is that the victim was not wearing a 
personal alarm when she was murdered. 

SENATOR BRULTE: Anybody been stabbed or 
assaulted at YTS since you've required people to wear personal 

MR. ALARCON: Oh, yes. Well, first of all, they 
should have always wore personal alarms, but since it was 
re-emphasized, yes. There have been, I believe, two since 

Most recent one — keep in mind, these are still 
under review and investigation, and some actions are probably 
going to result — but let's see, one of them had to do with two 
staff that took a ward down a hallway. The ward, who was in 
restraints, took off from the two employees and attacked another 
employee in another room. 

The other incident occurred when two of our staff 
were trying to remove a ward from his room. And he refused to 
cooperate. They sprayed pepper spray under the door. The ward 
took a blanket, sheet, and covered himself up. Staff went in 
before the pepper spray took effect, and the ward came out from 
under the cover and again hit the employee. 


Those are the two most recent incidents. 

SENATOR BRULTE: Prior to your demotion of 
Mr. VanderWeide, would you say he was an excellent employee of 
the agency? 

MR. ALARCON: I would say he was a good 
administrator, to my knowledge. 

SENATOR BRULTE: Is that why you sent him there? 

MR. ALARCON: Again, I sent him there for a 
couple reasons. One, because I believed he was at least a good 
administrator. Second, because I knew he wanted to go to YTS 
some day, and he was getting near the end of his career. And 
three, the opening came up, and we can't get a whole lot of 
people wanting to take Southern California institutions. And 
that's just reality. He was willing to do that. 

SENATOR BRULTE: Then someone was murdered, and 
he was demoted? 

MR. ALARCON: He was not demoted specifically 
because of the murder. There's only one person responsible for 
the murder, and that's the perpetrator, Mr. Ferris, who is being 

But what the murder did is, it pointed out a lot 
of things that were not right at that facility for which he does 
have responsibility. 

SENATOR BRULTE: Calls for speculation, but was 
he a model supervisor and administrator, getting outstanding 
personnel reports his entire career, and then made a mistake at 

Or, is the system such where he was not a model, 


just happened to get outstanding reports, and just did at YTS 
what he had always been taught to do? 

MR. ALARCON: Very difficult for me to answer 
that Senator. I appreciate what you're trying to get at in the 
question you're asking. 

But/ you know, I didn't directly supervise him. 
I go by evaluations, and in that particular case, who would have 
supervised him and who would have given — 

SENATOR BRULTE: But you put him in place? 

MR. ALARCON: I definitely put him in place. I 
don't think it's -- you know, there's only so many people that 
are eligible to take those positions. I think Mr. VanderWeide 
would have been considered somebody that definitely not only was 
eligible, but probably generally had done a good job. 

I wouldn't have put somebody there that we knew 
was going to be a failure. I mean, I at least had hope that 
that move was going to be a positive one for everybody. 
Unfortunately, it didn't turn out that way. 

SENATOR BRULTE: If the murder hadn't taken 
place, would we have had an independent review, or would we 
still be doing self audits? 

MR. ALARCON: No, we would have had an 
independent review. Sir, I had already initiated — it hadn't, 
unfortunately, got off the ground when all this happened, but I 
had been trying to get a peer review process going. Not 
necessarily outside agencies doing the review, but basically 
pulling people from different facilities to look at other 
facilities. And that was already in motion when all this 




CHAIRMAN LOCKYER: Are there other questions? 
Senator Ayala. 

SENATOR AYALA: I just have three more. 

Number one, nepotism, is it prevalent with the 
Youth Authority, about average, or below average? I know it's 
all over the state, we know that, but in your department. 

MR. ALARCON: If you talk about, are there a lot 
of employees that work in our department that are related to 
each other, you know, including several generations, probably 
above average. We're one of those organizations — 

SENATOR AYALA: Above average? 

MR. ALARCON: I think so, because people come to 
the organization and they stay. And then other people follow 
their fathers and mothers into the career. So, it's above 

SENATOR AYALA: Nepotism is when you favor — 

MR. ALARCON: But nepotism itself. Senator, I 
wrote our nepotism policy some years ago because I discovered 
when I was here just how many people were related to each other, 
and we didn't have a policy. 

SENATOR AYALA: But the answer is, it's higher in 
the Youth Authority than with other departments? 

MR. ALARCON: Having worked at four other state 
departments, yes it's higher. 

SENATOR AYALA: And the reason is? 

MR. ALARCON: Again, people come and stay, and 


they enjoy this career. 

We have a policy in place to minimize/ you know, 
inappropriate situations. And that policy is followed. 

SENATOR AYALA: If you have an opportunity, would 
you give this Committee, or at least me, a report on Preston, 
and the turning off the lights for economy purposes? I think 
that's a very serious charge that's been surfaced here to me. 

MR. ALARCON: I ' d be happy to do that. Senator. 

SENATOR AYALA: And number four, do you plan a 
CYA statewide audit to be conducted? 

MR. ALARCON: Yes, sir. 

SENATOR AYALA: You plan to do that? 

MR. ALARCON: I plan security audits every place, 
yes . 

SENATOR AYALA: Thank you. 

CHAIRMAN LOCKYER: Yes, Senator Hughes. 

To manage our calendar today, we're probably 
going to have to delay the confirmation discussion about which 
we have the greatest amount of latitude because the date is less 
immediate than some of the others, and that would be to not hear 
Ms. Reed today. 

If there is anyone who is from out of town that 
came to comment pro or con on her confirmation, perhaps you 
would stay, if there is anyone, so that we can at least get that 
testimony on the record. 

Just looking at how long we're taking with 
Mr. Alarcon, then what I would anticipate with Mr. Bishop, I 
think probably we've just got too big a load on too small a 



So, if there is anyone that wants to comment on 
Reed, maybe you'll let the Sergeant or someone know for me. 

Excuse me for interrupting. Senator Hughes. 

SENATOR HUGHES: Thank you very much. 

Maybe you've answered some of these questions. 
If you have, would you please let me know. I've been trying to 
follow this carefully. 

You said it's difficult to get staff to go to 
Southern California institutions. Why? 

MR. ALARCON: You know, I don't mean — 

SENATOR HUGHES: The weather is much better. 

MR. ALARCON: Those individuals, it's probably 
best to say that, but a number of things. One is the cost of 
living down there, purchasing homes. 

It used to be, you know, historically in the 
Department moving around numerous times during a career was not 
an issue. Now it is so costly to make those kind of moves that 
I think that's part of it. 

I think there is sort of a feeling, particularly 
on the part of managers and supervisors that grow up in Northern 
California, that they just don't have the desire to be in 
Southern California. 

SENATOR HUGHES: Since you said that there is a 
certain amount of nepotism, perhaps they don't want to leave 
family, extended family? 

MR. ALARCON: That can come into play as well, 
yes, ma'am. 


SENATOR HUGHES: Let's talk a little bit about 
when you started the peer review. How long did that system take 
place, and what happened that it fell apart? 

MR. ALARCON: You mean when we were doing self 


MR. ALARCON: We had self audit process in place 
for many years. I couldn't tell You exactly when it started. 

SENATOR HUGHES: Maybe I have the wrong 
explanation. I thought a peer review was when you had someone 
from another institution to review — 

MR. ALARCON: That's correct. What I indicated 
is, it was my intent to have peer reviews. 

SENATOR HUGHES: Right, but you never did? 

MR. ALARCON: No. We had this one major 
operation review, and we're going to have peer reviews. But as 
I said, I was in the process of getting it off the ground when 
all this happened. 

SENATOR HUGHES: Peer review sounds like a very 
good idea. Where did you get the idea from, and are you 
planning on pursuing that at any time in the future? 

MR. ALARCON: Yes, absolutely. 

Again, I've been looking at how can we get lots 
of other eyes looking at what we do. I think that's critical. 
We've had this group from CDC that's been going to our 
institutions and spending a great deal of time, giving us 

I've asked, again, ACA to look at how we might 



become accredited. 

Our education program, we've invited the Western 
Association of Schools and Colleges for the first time to take a 
look at certifying, accrediting our education programs. 

SO/ I'm very, very much in support of outside 

SENATOR HUGHES: I hate to go back and ask this 
question, but I really — 

CHAIRMAN LOCKYER: This is the last time you'll 
ever see this guy. 

SENATOR HUGHES: All right, so I might as well 
ask it. 

CHAIRMAN LOCKYER: Yes, they get very different 
once they're confirmed. 

SENATOR HUGHES: What were your inner feelings? 
I know what your outer manifestations were after the murder? 
What were your inner feelings when the murder took place? 

Then, what are your inner feelings as you look in 

MR. ALARCON: It was very, very devastating. I 
did not know Ineasie Baker personally, but I felt as if I did. 
I would be less than honest with you if I didn't say that it 
really weighed on me heavily. 

And each time that we talked about what happened, 
the various memorial services that I spoke at, her funeral which 
I spoke at, I mean, it was tough. It was like I had lost a 
family member, even though I didn't know her. 

SENATOR HUGHES: Did you feel any sense of 


responsibility? Did you feel that you could have done something 
to prevent it? 

MR. ALARCON: I asked that question many, many 
times. I mean, it was on my watch. So, ultimately, I've got to 
take the responsibility for anything that happens. 

Yes, I asked myself that question myself, is the 
there anything you could have done? 

SENATOR HUGHES; If someone told you that 
tomorrow at one of your institutions that there's a threat of a 
murder, what would you do tomorrow that you didn't do then? 

MR. ALARCON: If there was a threat of a murder? 

SENATOR HUGHES: Yes, if someone says, "Well, at 
institution X, we have underground information that there is 
going to be a murder, " what steps would you take? 

MR. ALARCON: Well, various stages in terms of 
emergency preparedness. And the first stage is, you pull in all 
the staff to that institution, regardless whether they're off 
duty or not, to get the additional resources necessary to do 
what you have to do . 

If there's a need to go beyond that, then the 
first thing we need to do is, turn to our sister agency, CDC, 
and get their assistance. Third stage is, we pull in local law 
enforcement and California Highway Patrol. And the ultimate 
stage in the most serious incident would be calling on help from 
the California National Guard. 

So, there are different resources that we could 
turn to if the situation was real serious. And we'd always 
involve local law enforcement on any investigation, criminal 




SENATOR HUGHES: Do the various institutions have 
different check-in and check-out policies? 

MR. ALARCON: The overall policy is the same. 
That iS/ that there shall be one. 

The way in which they do it varies somewhat/ and 
we want to standardize that. In fact, we'll be letting out a 
proposal here very shortly. We've redirected money in the 
current year. We froze some money in primarily minor capital 
outlay, and we're going to put in automated check-in, check-out 
systems at all our facilities. 

SENATOR HUGHES: Right now, are all check-in, 
check-out policies different at each institution? 

MR. ALARCON: The policies are the same. The 
practices are slightly different. 

SENATOR HUGHES: You mean the philosophy behind 
the policy? 

MR. ALARCON: Yes, they all meet some key 
criteria, but the actual practice varies. Like, some, as I 
mentioned, use ID badges. Others use a brass ID tag. 

So, there are different variations like that, but 
they all meet the same criteria. 

SENATOR HUGHES: Have you done a comparative 
study, where you have institutions where their check-in and 
check-out policies were similar, do you have a decrease in the 
number of I know incidents or an increase in them? Have you 
done any kind of comparative analysis? 

MR. ALARCON: I'm not aware of any differences in 


outcomes due to different check-in, check-out. 

SENATOR HUGHES: You didn't answer my question. 
I said, have you done any comparative analysis of those 
institutions -- 

MR. ALARCON: We've compared — 

SENATOR HUGHES: — where the policies were 
basically similar, and the number of incidents that occurred, or 
the lessened number of incidents? 

MR. ALARCON: Well, Senator, the only thing the 
check-in, check-out does is keep track of who's in the facility, 
when, and when they leave. 

SENATOR HUGHES: How do they show who was there? 
You said something about a card where they turned with their 
picture faces. Is there some other method of check-in, 
check-out that is different from that at some of the 
institutions? They have a check-in and check-out? 

MR. ALARCON: Other than IDs, or tags? 

SENATOR HUGHES: Yes, that's what I'm trying to 

MR. ALARCON: No, and we've looked at all of 
them. They all have some kind of variation on that. 

SENATOR HUGHES: Are there any that have had 
fewer incidents because their check-in, check-out system was 
similar to another? 

MR. ALARCON: I got you. I'm not aware that are 
any differences. 

SENATOR HUGHES: Do you plan on doing anything 
like that? 



MR. ALARCON: I'm planning on going beyond that. 
Senator. We're going to have a state-of-the-art check-in, 
check-out system with these automated systems. And they'll be 
fingerprint or handprint systems. They'll keep track by 
computer who's in, who's out, with definite ID, obviously. 

And there will also be an alarm system built in 
so that if somebody checks in, and they're assigned to 
particular shift, and they haven't checked out by the time 
they're supposed to check out, the alarm system goes off. The 
computer then alerts the security that we need to find out where 
this person is, why they haven't left. 

So, it's going to be a top of the line system 
when we're complete, and it'll be implemented — we will start 
installing the end of this month, and the last installation 
should be complete by August first. So, by the end of the 
summer, we'll have new systems in place. 

SENATOR HUGHES: All right, thank you. 

MR. ALARCON: You bet, thank you. 

CHAIRMAN LOCKYER: Other questions? 

Well, we're almost done. Let me first ask if 
there are people who haven't had an opportunity to testify or 
comment that would wish to have something added to the record? 

Yes, sir, why don't you come up, sir. This is 

Mr. Bivens. 

MR. BIVENS: Thank you, Mr. Chairman. 

CHAIRMAN LOCKYER: Good afternoon, sir. 

MR. BIVENS: Good afternoon to the Committee 

Members . 


My name is Bobbie Bivens. I am the President of 
the Stockton Branch NAACP. Also the Labor and Industry 
Chairperson for the State of California branches of the NAACP, 
and a National Board Member for the NAACP. 

I have some serious concerns here today with the 
confirmation of Mr. Alarcon. And those concerns are that he has 
been on watch directly or indirectly for almost ten years. And 
we have incidences of death taking place. 

It wasn't just a death, or that the young lady 
was killed. I mean, this is an individual. Not just a person 
that just died. 

The situation is that the folks at the 
institution didn't even care enough to try to find out what had 
happened to her after her family had called, which is a lack of 
concern on their behalf. 

We're fortunate that more people have not been 
killed or that no research has been done, or that no one has 

This woman's child called to see where her mother 
was, and nobody bothered to go look and see. Nobody cared, 

This man, Mr. VanderWeide, wasn't demoted, as 
the question was asked. He was promoted to another position 
that was created for him after this woman's death. 

That's the kind of situations we have taking 

We have other concerns that, at the top 
administrative level of staff, there is a disparity in racial 


equity, that the promotional picture that was shown to you in 
these charts that were distributed today are inaccurate, and 
that they do not speak to the disparity in the promotions. They 
do not speak to the fact that in the State of California 
correctional system, or the Youth Authority system, there is but 
one Asian female at an administrative position. The number of 
Asian males is very low. 

The picture looks beautiful, but it's not broken 
down into categories. It does not speak of ethnic promotions, 
female promotions. It simply says an entire group. It does not 
go into the categories of the promotions. It doesn't say 
whether they're administrative, or whether they're supervisory, 
or whether they're directors, assistant directors. None of that 
is spelled out. 

This is simply a chart to say that X number of 
minorities were hired lately or promoted. Not even hired. It 
doesn't speak to the hiring patterns. There's nothing in these 
charts that were presented today that speaks to the hiring 

The other concern that we have is that for the 
average African-American, it takes 15 years to get promoted, 
15. For other groups, and particularly white males, it takes 
about two years. 

We're concerned that that level of disparity has 
taken place under this man's watch. And to say that we're going 
to do all of these things in the future, when the opportunity 
has been there in the past, is kind of like saying, well, we've 
let the horse out of the barn, so let's go out and chase him and 


catch him/ when in fact there was an opportunity to put up a 
fence to prevent it/ to take some action to ensure that equal 
opportunity and access exists for all people. 

We're not advocating that just African-Americans 
have equal opportunity. We're advocating that all people have 
equal opportunity. 

The number of African-American females that are 
at your higher level positions are have few. If we take a look 
at the Northern California facilities/ you've got for 
supervisors, you have three white males/ you have one Hispanic 
male, no black males/ no white women/ no Hispanic females, no 
black females/ no Asian males/ no Asian females. 

If you take assistant superintendents, you have 
one white female, one white male, two Hispanic females, one 
black male, and none of the rest. 

Those numbers are not being broken out in his 
charts. I've taken the time to do the research, and I don't 
have access to the entire system, the data base and all that. I 
simply talked to individuals and did my research to find out 
nameS/ faces, and places. That gives the information. If I can 
do it, I'm sure he can do it. He ' s a lot smarter than me. He's 
heading up the department. I'm just a poor businessman. 

The other concern that we have is that there is a 
break down. There is no breakdown into the opportunities for 
the new hires, the new promotions. This chart does not speak to 
where the opportunities were. We don't know if there are a 
hundred opportunities, ten opportunities, or zero 
opportunities. That was not spoken to. 


But a beautiful picture is being painted in here, 
saying that we have ethnic diversity in our workforce. And 
certainly in California/ we all want it, and certainly we all 
deserve it. 

But to have a picture painted that makes it look 
like something is here that's not here leads to another lie. 

So, are we going to be lied to continuously by 
the department heads and the people that run our state 

We're concerned with the retaliation against 
African-American employees and Hispanic employees that dare to 
complain about the system, that complain that they're not being 
treated fairly. And in fact, what happens to them is, either 
they get shipped out, or so much pressure is put on them that 
they never say anything, that the system just continues to roll 
along, status quo, or status as usual. 

And the other side of it is, we've had two people 
commit suicide because their issues were not addressed. These 
things are not being said. 

This individual is responsible to see that the 
people that work under him don't create that type of climate. 
That type of climate has been created. 

So, we're not talking about one death here. 
We're talking about three deaths, and we're not even talking 
about wards yet. We're talking about employees of the State of 
California that go to a job, that feel that they should be able 
to go and work and be in a safe environment, and ended up dead. 

Now, if these are not factual statements that I'm 


making, he can refute what I'm saying, because the truth will 
bear me out. 

African-Americans are having a lot of difficulty 
getting promoted within the system. There needs to be an answer 
as to why. 

I know you won't get the answer today. I know 
that that's just part of the process that we're going through 
here, but somewhere along the line, those questions need to be 

And if this gentleman is going to be confirmed, 
then he needs to be held accountable, and he needs to come back 
in 30 days, 90 days, or some period of time to answer these 
questions as to why these disparities exist. 

I'm not saying don't confirm him at some point, 
but certainly he's got to come back with a plan that's 
functional and workable, and I don't see that. I haven't heard 
it. And to talk about what we're going to do, look at his 
staff, and that'll tell you what's been done. 

If he's been there for 10 years of watch, either 
directly or indirectly, because some of the time, the folks that 
were directly in charge weren't there, because they were busy, 
out trying to get other jobs, or they were busy doing other 
things . 

So, this man has been the man at the 
institutions. So, all of these has been under him. And those 
are some concerns that we have. 

It's not anything personal. It's about business. 
It's about the fact that he's going to be in a position over the 



lives of people that there hasn't been any concern for, either 
their hiring, their promotion, or the fact that they stay alive 
or die. 

And unfortunately for any person that would be in 
that position, we will be here. We will be speaking to these 
issues, and we are concerned. 

We have addressed issues in Stockton at the youth 
institution down there. We have raised complaints. Here's 
newspaper articles. So, I'm not just here for the first time 
speaking to the concerns that have taken place. There have been 
a large number of complaints that we have received at the NAACP, 
not only from Youth Authority, but from the Department of 
Corrections overall. 

And unfortunately, we're out here as volunteers, 
overseeing people that are being paid 90, 80, 70 thousand 
dollars a year that's supposed to take care of these things, and 
we have to come out here and spend all of our time away from our 
business or for free, trying to correct problems that should be 
handled internally. 

I certainly hope that you would give serious 
consideration to the action that you're planning on taking, and 
at least get some answers that make sense before this 
individual's confirmed, if he's confirmed. 

Thank you very much for your time and the 

CHAIRMAN LOCKYER: Thank you, Mr. Bivens. 

I'll note that there are also people present 
indicating that they've had job, promotional, or hiring 


problems. I don't know if anyone wants to coimnent . You're 
entitled to if you want to make a comment/ or we'll just 
acknowledge it for the record either way. 

MR. DOUGLAS: I have several questions for 
Mr. Alarcon, and I would like for him to answer them. 

CHAIRMAN LOCKYER: Why don't you identify 
yourself for the record? 

MR. DOUGLAS: Sure. My name is Dossey Douglas, a 
group supervisor applicant. I applied in '92, '94 for a 
position of group supervisor. Applied, went through the whole 
analysis and everything, and was told that I could not get the 
job simply because of my color vision. 

My previous employment was with the United States 
Navy. I was an air traffic controller and navigator. 

I was told that I had to take Form D-15 test to 
see the severity of my color discrimination — I mean, my color 

Once I took that, I was scored a moderate. Okay. 
I investigated and looked at the state specifications and 
Department of Youth Authority specification, which I have right 
here. And the final recommendation states that ability pass or 
be within mild to moderate for -- to get the job. 

Once I submitted this paperwork to the Department 
of Youth Authority, I was denied. Not only at Alarcon's level, 
but State Personnel Board level. 

I then wrote to Senator Greene. I wrote a letter 
to Mr. Alarcon, which I have, and he said there was no textured 
racism or discrimination against me in this matter. 


I guess I only ask the question, if I qualify in 
his own laws or ruling, why is that I don't have a job? 

That's my question I have for you, Mr. Alarcon. 

CHAIRMAN LOCKYER: Would you know about this 
specific thing? 

MR. ALARCON: No, Senator, I wouldn't. 

I'd be happy to discuss with you after this 
hearing, get more information about your situation, but I 
couldn't respond to you here. 

MR. DOUGLAS: Okay, Mr. Alarcon, I understand 

But I received a letter that I addressed the EEOC 
at the Headquarters, and I addressed this matter to them because 
I thought, at some point, it was textured. 

I received a letter from you, or signed by you, 
stating that there had not been any discrimination, and 
everything was ran okay. 

I am unhappy with that, and very much I see no 
desire — 

MR. ALARCON: You said this went to the State 
Personnel Board, and they also denied you. 

MR. DOUGLAS: Yes, and my doctor appeared also 
and wrote a letter in my behalf, because he agreed that it was 
some foul play in the matter, too. And this is a professional 
doctor that has his license through — license of optometry. And 
once again, your doctors that you have do not have that 
specialty to make that prognosis, to make that decision that I 
was unsuitable. 


Once again, I state the fact if I'm suitable to 
become an air controller and navigator for the United States 
Navy, I cannot see the problem as to why I wouldn't be 
sufficient to do the job as a supervisor. 

CHAIRMAN LOCKYER: Is this about your color 
blindness, eye condition? 

MR. DOUGLAS: Yes, sir. 

CHAIRMAN LOCKYER: Senator Hughes on this. 

SENATOR HUGHES: You used a terminology that I 
didn't understand. You said your application was textured. 

What does that mean? Is it part of the jargon 
of the industry? 

MR. DOUGLAS: That was used within the letter 
that I received from the Department of Youth Authority. 

Textured means that it wasn't fabricated against 
me, meaning the fact that there was no foul play. 

I find it to be foul play when I qualify in their 
own writing, and still I do not have the job. 


CHAIRMAN LOCKYER: The most I think we can 
suggest is that if Mr. Alarcon or appropriate staff would be 
made available to review the file and give you a complete answer 
after the hearing or tomorrow, Mr. Douglas, we'll do that. 


One more question for Mr. Alarcon. 

What is the Department standard for a person with 
color vision deficiency? Do they have to pass the D-15 test, 
meaning that there's no color vision deficiency, or can they do 


the job within the standard of mild to moderate? 

MR. ALARCON: There are number of standards that 
have to be met, as you know, on the medical and physical. I'm 
not an expert on color blindness, and what those standards might 

There might be somebody here in the audience that 
is, and maybe we can check afterward and see what it is, unless 
you're just testing me to see if I know. I don't know, if 
you're asking that. 

MR. DOUGLAS: Well, I do . I guess I've done my 
research on it, and you have case laws that state that a person 
with mild to moderate color vision deficiency can perform 
essential job functions with little to no problems. And that's 
on page 40 or 41 of this book here. 

Also, page 93, the finding on recommendations 
states that ability to pass or be within mild to moderate, 
meaning the fact that you're not color blind or you fall within 
the standards of mild to moderate. 

And if this is so in your own writing, and I fall 
within those standards, I find that to be to be a problem. I 
don't think it'd take a doctor to see that that's a problem. 

CHAIRMAN LOCKYER: Are you working now? 

MR. DOUGLAS: Yes, I am. 

CHAIRMAN LOCKYER: How long has this been? 

MR. DOUGLAS: This has been going on ever since 
November of 1994. 

CHAIRMAN LOCKYER: If we could, Mr. Alarcon, 
review the standards and let Mr. Douglas know. 


We want to have his expert go through that with 
you, and then let Ms. Michel, know either or both of you, what 
the outcome is. 

MR. DOUGLAS: One other question. 

Also not now but maybe later, you can review the 
paperwork that I have set up and see what's going on with it — 

CHAIRMAN LOCKYER: Okay, well, hopefully your 
department likes hiring people with initiative. You've got one 
here . 

[Laughter . ] 

MR. ALARCON: He definitely showed that; didn't 

CHAIRMAN LOCKYER: Thank you, sir. 

MR. DOUGLAS: Thank you for your time. 

CHAIRMAN LOCKYER: Is there anyone else that 
hasn't had a chance to comment? 

Mr. Alarcon, I want to ask you, in the time 
you've served as Director, is there any particular decision that 
stands out in your mind as the most difficult? 

MR. ALARCON: I think any time that I make a 
decision involving personnel, it's difficult. I make them. 
That's my job, but I know that when I make those decisions, it's 
is not just affecting that individual human being, but there are 
other human beings attached to that person that are affected as 
well. I think that's probably the most difficult job. 

CHAIRMAN LOCKYER: I know what you mean. 

SENATOR LEWIS: Mr. Alarcon, I'm looking at these 
charts that were passed out. I guess some of the sources were 



the State Personnel Board. 

I guess my question after reviewing this is, just 
in the last year or so, has there been a dramatic increase in 
the percentage of minority employees that are getting 

MR. ALARCON: Yeah, I didn't really respond. 

I never met Mr. Bivens, by the way, and I'm 
looking forward to talking with him because that was all new 

But my record is just outstanding on promotions 
and hires. 

CHAIRMAN LOCKYER: What is your record? 

MR. ALARCON: All you have to do is look at my — 
my makeup of my staff. 

Well, promotions, he made reference to 
African-American. I believe this past year -- 

CHAIRMAN LOCKYER: How do you break it down? Are 
there certain deputies, or assistants, or supervisors? As you 
try to analyze your department, what are the relevant employment 

MR. ALARCON: We've looked at it in a variety of 
ways, you know, total labor force, management only, supervisors 

CHAIRMAN LOCKYER: What's management? What's 
upper management? 

MR. ALARCON: We have 65 to 70 positions out of 
5400 that are designated manager. Probably half of those are 
CEAs, Career Executive Assignments, and the rest are just 


regular civil service managerial positions. 

CHAIRMAN LOCKYER: What do you think the ethnic 
breakdown in that pool might be? 

MR. ALARCON: It might even be in those charts. 
You know, I did not put those charts together. Those were 
pulled from official records. State Personnel Board records. 

CHAIRMAN LOCKYER: These are promotions, I think. 

SENATOR LEWIS: No, there's an ethnic profile on 
employees . 

MR. ALARCON: If I can address, let me address 
specifically African-American employees, if I might, since that 
was one of the things brought up. 

In the last year, I've made several key 
appointments. Now, I've got to tell you, I make the 
appointments because they are people that I believe can do the 
job, not because of their ethnicity, or color of skin, or any 
other criteria. 

CHAIRMAN LOCKYER: That ought to be the first 

MR. ALARCON: And that is my first consideration, 
is they can do the job. 

But I've made four key African-American 
appointments just with this last year. The number two person 
over all institution and camps is an African-American female 
that I Appointed. 

The head of Parole Services for all of Southern 
California I appointed this year is an African-American male. 

The person who heads our Free Venture Program, 


which is the program that we have in partnership with private 
industry to work with these young people, get them jobs, and 
hopefully transition them to the community, I appointed this 
year, is an African-American male. 

So, I don't quite understand — 

CHAIRMAN LOCKYER: Out of how many appointments 
that you made in total? I don't mean where you approve 
something lower. 

MR. ALARCON: That I directly have made? 

CHAIRMAN LOCKYER: Yes, how many is it? 

MR. ALARCON: Again, we have 65 to 70 positions, 

I'd say — 


CHAIRMAN LOCKYER: How many of those moved 

MR. ALARCON: There were a number that were 
merely rotations and moves. I'd say maybe 20 of those. And 
then maybe I personally made another 20. I'm just guessing off 
the top of my head, in that neighborhood. 

CHAIRMAN LOCKYER: And of the 20 you personally 
made, you would -- 

MR. ALARCON: I could think of -- 

CHAIRMAN LOCKYER: -- you'd probably have to do 
the research, but you have a feeling that you could defend -- 


CHAIRMAN LOCKYER: — both competence and 
diversity characteristics? 

MR. ALARCON: Yes, sir. 

CHAIRMAN LOCKYER: We'll probably, before we vote 


on the Floor, at least examine the numbers with you to make 

MR. ALARCON: Excellent. 

SENATOR LEWIS: According to the chart I have, it 
appears that about 22 to 23 percent of the Youth Authority 
employees are black. According to another one of the charts, it 
says that of the promotions that were granted, in the last year 
or so it was 24 or 25 percent black. 

MR. ALARCON: I believe that's correct. 

SENATOR LEWIS: One of the prior witnesses said 
that the average wait for black employees for a promotion is 15 
years. That the average wait for a white employee is two years. 

MR. ALARCON: I've never heard those figures 

SENATOR LEWIS: That would be contradicted by 
this chart unless there's been a huge upswing in minority 
promotions in just the last year or so. 

MR. ALARCON: And I can't believe that that's 
the case. Senator, because our hiring intake has always been 
pretty diverse, at least over the last decade. So, I can't ■ 
believe we've suddenly had a major surge. 

MR. BIVENS: This chart does not say over the 
last year. This speaks to the statistics from last year to 

It does not say that this took place in the last 
year, nor does it address racial and sexual harassment cases in 
the Department, either. 

CHAIRMAN LOCKYER: Senator Hughes. 



SENATOR HUGHES: I'm looking at two sets of 
charts here. One says promotions from July '96 to December 31, 
'96. You have 25.2 percent African-American out of 29, and 23.3 
percent Hispanics out of 27. 

When it comes to Educational Services, I note 
it's proportionately greater. 

Because I don't know enough about your 
Department, and then you can inform me, you have 18.6 percent of 
African-Americans promoted in Educational Services branches; as 
compared to Hispanics, only 7.4 percent; and Asians, 11.1 

Is it because these individuals are better 
educated for the positions that they hold in the Educational 
Branches Services? Is this the reason that more 
African-Americans and more Asians were promoted? 

I'm just trying to make heads or tails out of 
these charts. 

MR. ALARCON: That figure, 7 percent, are under 
representation of Hispanics, is pretty startling for education. 

I don't know what the answer is there. We need 
to do a better job of recruiting, obviously, to advance more 
Hispanics, more qualified Hispanics. 

But on the other hand, we have led the state in 
our representation of Hispanics in -- over all areas, and most 
other areas, but education, for some reason, we do seem to be 

SENATOR HUGHES: No, but I wasn't saying that as 
a negative. I was saying it also as a positive in terms of 


African-Americans. You had a higher percentage, and I was a bit 
surprised that you had less of a percentage of Asians. 

MR. ALARCON: In the custody area? 

SENATOR HUGHES: In the Educational Services. 

I'm wondering, if you hire people in Educational 
Services Branch, are they people who have more formal education? 

MR. ALARCON: Well, obviously, they have to have 

SENATOR HUGHES: So that there are better 
educated people in the Educational Services Branches as compared 
with the other, proportionately? 

MR. 7VLARC0N: Generally that's the case. 

SENATOR HUGHES: I'm asking. I'm not telling 

MR. ALARCON: No, generally that's the case, 
because our teachers, obviously, are credentialled. 

Our group supervisors only require high school 
diploma and experience. 

Now, youth counselors, on the other hand, does 
require at least a minimum bachelor's degree. So, if we were 
to separate youth counselors out, you would see that makeup as 
being very comparable. 


MR. ALARCON: Thank you. 

CHAIRMAN LOCKYER: Are there other questions from 

With respect to the promotional practices, I 
would hope that Mr. Hurdle and Ms. Michel will give us some 



review, and perhaps you'll have a chance to talk specifically to 
Mr. Bivens about the points that he's raised and get him as 
complete a response as you can. 

We are obligated to act on an appointment by the 
Governor within one year of the date in which the appointment 
was made. They stack up, and sort of planes are circling the 
airport, waiting to land here. 

We have until May 14th for Mr. Alarcon, which 
means that voting next Monday, a week from today, would be the 
last opportunity we have to act on this. 

So, I hope we can look at that information -- 
looks like your support staff says yes, you can -- sometime 
during this week, sir. 

SENATOR AYALA: The suggestion is that it's put 
over for a week? 

CHAIRMAN LOCKYER: No. Rules needs to act today, 
if we're prepared to, but the Floor, we won't do it this 
Thursday. We'll wait until the last possible time so that every 
opportunity to find relevant information will be exhausted, 
other things. 

Did you want to say anything in closing? 

MR. ALARCON: No, thank you. I appreciate this 
process. I know it's a lengthy one for everybody, and I think 
it's an appropriate one. Thank you very much. 

CHAIRMAN LOCKYER: Mr. Alarcon, many people who 
have worked with you personally have commented in the most 
complimentary ways possible. 

MR. ALARCON: Thank you. Senator. 


CHAIRMAN LOCKYER: And it's very hard for us, 
hearing these disputes, to be a court and retry them, or try 
them, or whatever. 

But I think perhaps what we're seeing something 
of is a general feeling of concern and disquiet with respect to 
the Authority, that there seem to be a lot of problems there 
that need attention. 

I don't know that those are things for which you 
personally should be held accountable, but you're hearing that, 
I think, from a variety of individuals and Members that have 
concerns . 

So, personally, I am satisfied that you're 
dedicated to making a difference with these wards, and want to 
manage an agency that is a superlative place in which morale and 
competency is rewarded, and Morale is reflected in that 
environment . 

What's the pleasure of the Committee? 

SENATOR LEWIS: Move confirmation. 

CHAIRMAN LOCKYER: We have a motion by Senator 
Lewis to recommend confirming. 

I also have this extra task of counting votes. 

Call did roll 

SECRETARY WEBB: Senator Ayala. 


Ayala Aye. Senator Brulte. 


Brulte Aye. Senator Hughes. 

Senator Lewis. 



SECRETARY WEBB: Lewis Aye. Senator Lockyer. 



Lockyer Aye. 

Hughes Aye. 

Hughes Aye. Five to zero. 
CHAIRMAN LOCKYER: Good luck, sir. 
MR. TUoARCON: Thank you very much. Thank you 


CHAIRMAN LOCKYER: We have to let our recorder 
take a break for just a couple of minutes. Perhaps we could 
just do bill referrals or something to give us a couple of 
minutes here. 

[Thereupon the Rules Committee 
acted upon other agenda items.] 

CHAIRMAN LOCKYER: This is a wonderful law firm 
that does extraordinary work, and I can attest to that. But 
other than that, what about this fellow? 

SENATOR SHER: Mr. Chair, Members of the 
Committee, it's my great pleasure and privilege to introduce to 
you Mr. Laurence K. Gould, Jr., an outstanding member of the Bar 
of the State of California. 

As you have referenced. Senator Lockyer, a member 
of the firm of Sheppard, Mullin, Richter and Hampton, one of the 
premiere law firms in the state dealing with, among other 
things, some of the most important commercial law issues that we 
encounter in this state, a subject that I have dealt with 


Mr. Gould was a student of mine. You won't 
believe this — 

CHAIRMAN LOCKYER: I was looking here for the 

SENATOR SHER: Thirty years ago, 1971, and I had 
been at Stanford Law School for a number of years even at that 

CHAIRMAN LOCKYER: What was his grade, do you 

SENATOR SHER: We don't really put a lot of stake 
on grades, and I don't know the answer to that, but I'm sure 
that he did very well in the contracts course he took from me. 
Therefore, he had an excellent beginning on his legal career, 
not because of my course, but because of the great legal 
education he got at Stanford Law School. 

He has been an outstanding member of his 
community, involved in many civic activities, both legal and 
otherwise, other nonprofit activities, including the Pasadena 
Historical Museum, the Los Angeles Music Center Opera Lounge, 
the Los Angeles Central City Association. 

We could not have a better candidate for Trustee 
of the California State University than Mr. Gould. He is 
respected in every way in his community and in the legal 

So, as I say, it's my privilege and pleasure to 
be able to introduce him to you today. 

CHAIRMAN LOCKYER: I'm going to suggest, because 
there are some serious issues, like student fees, affirmative 


action, governance, and so on, that we take our five-minute 
break now, if you don't mind, Mr. Gould. We'll resume as soon 
as we come back. 

MR. GOULD: Thank you very much. 

[Thereupon a brief recess was taken.] 

CHAIRMAN LOCKYER: Senator Schiff, did you want 
to jump in here. 

SENATOR SCHIFF: I wanted a chance to introduce 
Larry Gould when you get to him. 

CHAIRMAN LOCKYER: Well, he ' s a man that could 
use more than one introduction. Why don't you come up and do 

Senator Sher was by, and I'm glad you know of his 
presence as well. Go ahead, tell us whatever you want. 

SENATOR SCHIFF: Just another illustration of how 
we Stanford people stick together. 

We realize that we're well out numbered by the 
Cal people up here, so we have to do our best to stick together 
when ever possible. 

I'll ask you to forgive his attendance at Yale 
University. That was definitely a drawback. 

I wanted to just appear briefly, Mr. Chairman and 
Members, to speak on behalf of Mr. Gould. I've had the chance 
to sit down and get to know him a bit in the district. I've 
heard from a lot of people that I very highly respect throughout 
the community that I represent that have impressed upon me the 
wonderful reputation that Mr. Gould has in our community as a 
very thoughtful person, a very diligent person, hard working. 


really who has the best interests of educating our 

He really comes with the most superlative 
recommendation from a lot of people from different party 
affiliations, different backgrounds in the district. I think 
he'd make a tremendous asset to the Board of Trustees, and I 
would urge your strong consideration of his candidacy. 

CHAIRMAN LOCKYER: Thank you. Senator. 

Well, it's your turn. 

MR. GOULD: You didn't want to take the others 
first? I could wait. 

CHAIRMAN LOCKYER: No, go ahead. 

MR. GOULD: For the record, I'd just like to 
thank very much Senator Sher and Senator Schiff, both for being 
here today and introducing me, and I appreciate it very much. 
And I thank you for your kind comments. 

SENATOR SCHIFF: You're on your own. 

MR. GOULD: The only difference is, 30 years ago, 
I only wish that Senator Sher had had those same high thoughts 
in mind when he was creating my final exam in contracts class. 

I'd just like to briefly summarize some of my 
background. I've been a lawyer at Sheppard, Mullin, Richter and 
Hampton in Los Angeles for 30 years. You might recognize us in 
the Los Angeles area. We sponsor the News Hour with Jim Lehr on 
PBS television down there. 

One of the things that I've been involved with at 
the firm is my colleagues, partners in the law firm, had elected 
me to the Compensation Committee, which is the Compensation 


Committee that determines the compensation of partners in a law 
firm. When one is dealing with, if you will, divying up the pie 
of 100 different individuals, it's a delicate and sensitive 
issue. I was elected to two terms on that, re-elected to a 
second, and re-elected to a third — 

CHAIRMAN LOCKYER: They don't have term limits? 

MR. GOULD: Then I was termed out. 

So, I got off that assignment, but I think it 
does exemplify the thoughts of the people having me, that my 
colleagues looked at me as someone who was fair and thoughtful, 
and could be able to do something that was -- would come up with 
a sensible solution in a sensitive matter area. 

In my practice area, I've been a partner there, 
but I changed couple years ago my status to counsel so I could 
have more time to be involved in civic affairs and public 
service activities. I won't go through any of them. They're in 
my resume which you have, except to point out one of the things 
I've been involved with is the Delia Martin Foundation, which 
has endowed chairs for research at UCLA, at USC, at UC Irvine, 
endowed a mental illness post-graduate doctoral fellowship at 
Cal Tech, and all of those in higher education. 

I've dealt with a lot of nonprofit, both mutual 
benefit corporations and public benefit corporations in my 
practice, and in addition in the tax area. And last year, when 
I was asked to go on the Board of Trustees of the California 
State University, what I wanted to determine for my own self 
was, is it worth -- if this the area where I could best spend my 
time in undertaking affairs in the public service area. 


I reviewed CSU Board. I was very impressed with 
the leadership team which Barry Munitz and the Board of Trustees 
have. I felt it was a very important area to be involved with. 

One of the areas I've been involved with, as I 
mentioned, is the nonprofit area, where I confirmed one of the 
areas I'd hoped to be involved with on the Board of Trustees is 
trying to increase fundraising efforts of the CSU to get more 
public-private partnerships, to bring in more financial 
resources to the CSU system. 

I know that you have very long agenda today. I 
would look at this whole opportunity as being basically one of a 
stewardship in which, at the end of my term, if confirmed, I 
could look back on it and say that I made a significant 
contribution in trying to improve higher education in 

And with that, I would open it up for questions. 
I know the hour's late. 

CHAIRMAN LOCKYER: Student fees is an issue we 
have regularly asked Trustees to try to determine their approach 
and attitude with respect to the matter. 

Do you have any general philosophy? 

MR. GOULD: My general philosophy in that lies 
basically in the area with the basic premise of the Master Plan 
for Education in California, which is that after high school, 
students ought to have the opportunity to go to college, and 
that it ought to be accessible and affordable. 

The average profile of the students that we have 
CSU is such that our average student is 27 years of age. The 


average student works 30 hours a week. Many of them are 
supporting their own family, or their parents or children. 
They're all on very tight budgets, and I think we ought to do 
everything we can to keep the CSU system as affordable as 

And I'm very pleased in the last two years, the 
Legislature has seen — and Governor — have both seen fit to 
not have any fee increase allowed. 

CHAIRMAN LOCKYER: Has there been a controversy 
before your Board about the affirmative action policies? 

MR. GOULD: What the Board has done is, when the 
whole dialogue began, basically the Board reviewed all of our 
policies to see what the nature of our policies were. We wanted 
to make sure that all students have equal access for equal 
opportunity at the CSU system. 

We reviewed our policies and determined that our 
policies are those which have open access and the like. And 
with regard to that, in the last election, having reviewed our 
policies and determining that none of ours -- all of ours were 
those of being open, to open access of all students equally, 
our Board officially took no position either for or against, and 
took no role in that. 

CHAIRMAN LOCKYER: Other questions? Senator 

SENATOR HUGHES: Mr. Gould, your institutions are 
the ones that train the teachers who go out and teach in the 
public schools. 

What do you think should be the role of the CSU 


system in terms of interacting with schools to upgrade the 
quality of their education? 

MR. GOULD: I think they have to be working 
together closely on that, because, as you pointed out, CSU 
produces almost half of the teachers in the State of 
California. And we have to work closer with the teachers to 
make sure that the teacher performance improves, that you have a 
complete unity between K-12 and the CSU system, or the remaining 
community colleges and higher levels, so that the students that 
graduate from the high schools of California are prepared and 
can deal well in the university area. 

We need to improve our teaching in California, I 
think, and we have found in the University, in the California 
State University, approximately 40 or 50 percent of the students 
need additional help. We need to make sure that the teachers 
are doing better in the earlier grades, and that the students 
are doing better in earlier grades. 

SENATOR HUGHES: How closely are the CSU campuses 
working with the Superintendent of Public Instruction to see 
that there's a decrease in the need for remedial education as 
these students want to get into higher education? 

MR. GOULD: As to the exact details of it, I 
can't say. But overall, all what we are doing is working and 
setting standards so that at lower levels, at fourth grade, at 
sixth grade, at eighth grade, with regard to reading skills, 
with regard to mathematic skills, what a student ought to know 
at eighth grade and at high school, and what proficiency they 
ought to have so that when they go on, they can take full 


advantage at the higher education level. 

SENATOR HUGHES: How many institutions in the 
system are giving opportunities for high school students to take 
courses at the CSU campuses? I know that some of them -- 

MR. GOULD: A very large number. I do not know 
exactly the exact number on the 22 existing campuses and that 
one that's in plan. But I know of large amounts that are. 

And some, like at Cal State Los Angeles, at Cal 
Poly Pomona, I know each are involved with different high school 
situations, and involved with promoting those efforts. 

As to the exact number, I think it's very large. 


CHAIRMAN LOCKYER: Other questions? What's the 

SENATOR AYALA: I'll move. 

CHAIRMAN LOCKYER: We have a motion by Senator 
Ayala that we recommend confirmation — 

May I record the four of us present as voting 
Aye? That'll be the order. 

[Senator Brulte later added his 
Aye vote, making the final vote 
5-0 for confirmation.] 

MR. GOULD: Thank you very much. I look forward 
to working with you in the future. 

CHAIRMAN LOCKYER": Mr. Trigg, we've all had an 
opportunity to review the record from the prior hearing. 

Senator Johnston wanted to pop in, but I don't 
think that may be necessary. 


Were there any additional questions Members had 
wished to ask of Mr. Trigg, who's a member of the State Board of 
Education? All Right. 

SENATOR LEWIS: Move confirmation. 

CHAIRMAN LOCKYER: We have a motion to confirm. 
May I record the four of us? Okay. 

[Senator Brulte later added his 
Aye vote, making the final vote 
5-0 for confirmation.] 

MR. TRIGG: Thank you very much. I appreciate 
your confidence. 

CHAIRMAN LOCKYER: Thanks. Good luck. 

All right, now Mr. Bishop. We're getting there. 

Do you want to start with any kind of opening 

MR. BISHOP: With your permission, Mr. Chairman, 
I'd like to make a very brief opening statement. 

CHAIRMAN LOCKYER: You can make a long one. 

MR. BISHOP: I was appointed to the position of 
Commissioner of Corporations not quite a year ago. Each day 
since then, I've felt keenly the tremendous responsibility that 
I have undertaken. 

This is the responsibility to carry out and 
enforce all the laws under the Department's jurisdiction as 
objectively and as evenly as I possibly can. 

As Commissioner of Corporations, I am charged 
with the oversight of ten different laws. Virtually every 
Californian is affected by the industries that the Department of 


Corporations regulates. These industries include: the 
securities industry, the franchise investment industry, the 
escrow industry, the mortgage banking industry, and the managed 
care industry. 

So, whether your buying a stock, taking out a 
mortgage, or getting health care from an HMO, you have an 
interest in how well the Department of Corporations is doing its 

In the last few months, I believe that the 
Department of Corporations has taken significant steps to 
strengthen its oversight over all of these laws. 

California in the last ten years has witnessed a 
revolution in its health care delivery system. No revolution of 
this magnitude occurs without controversy. Every decision that 
I am called upon to make in the health care area involves strong 
and competing interests. So, in making these decisions, I try 
to listen to and consider these interests. 

In this environment, however, it's simply not 
possible to make a decision without drawing criticism from one 
interest group or another. That is why I believe it is 
absolutely essential that the Department apply the law in as 
thoughtful, and as fair, and as balanced a manner as it possibly 

Since I became Commissioner less than one year 
ago, I believe that the Department has strengthened its 
oversight of the managed care industry. We have improved our 
handling of consumer complaints. We have also stepped up 
significantly our enforcement actions against plans. 


There are many challenges ahead for the 
Department of Corporations/ and I want you to know, 
Mr. Chairman, that I am up to the job. And I look forward to 
working with each of you in meeting these challenges. 

CHAIRMAN LOCKYER: I think there are probably a 
lot of questions, and I expect a significant amount of 
testimony. So, why don't I just open it up in that way. 

Senator Rosenthal, did you want to start? 

SENATOR ROSENTHAL: Thank you very much, 
Mr. Chairman, Members, for permitting me the opportunity to 
participate in this confirmation hearing. 

As Chair of the Insurance Committee, which has 
jurisdiction over the HMO issues, I have strong interest in the 
job of the Commissioner. I have a brief opening observation, 
and then some questions that I would like to ask. 

When the Governor appointed Keith Bishop as CDC 
Commissioner, he praised him as an expert in securities and 
corporation law. He noted Mr. Bishop had authored a book on 
Nevada corporation law and served on a Senate commission related 
to corporations and securities. 

However, the Governor was silent on the issue of 
Mr. Bishop's health care experience. The DOC Commissioner is 
the state's top watch dog for HMOs, and I think that health care 
regulation is the most important aspect of the Commissioner's 

One of my colleagues on the other side of the 
aisle has openly expressed his concern that Commissioner Bishop 
may lack vision as to what is necessary to achieve quality in 


the health care area. 

In addition/ the Chair of the Governor's HMO Task 
Force has indicated his view that HMOs should be regulated by a 
health care expert. 

So, I'm not confident that a securities attorney 
is the best person for the job. But let's see as we pursue some 
of the questions that I would like to raise. 

Mr. Bishop, you're aware that there are more than 
a hundred bills dealing specifically with HMOs. You've 
indicated that some of these bills appear to be misguided, and 
that the DOC does not need new laws to do its job. 

You've been quoted in the Wall Street Journal at 
stating that a handful of legislators are simply, quote, 
"looking for something to do, " end quote, to appease 
constituents frightened about HMOs. 

Do you believe there's no reason for Legislators 
to be concerned about how HMOs treat their patients? 

MR. BISHOP: Senator, I would like to say that I 
regret that that quote was taken out of a long interview. It 
certainly did not convey my full views, which I expressed. 

I believe that the Legislature absolutely has a 
strong interest in the state of HMO regulation in California. 
We are in the midst of a very, very dynamic change in terms of 
the health care delivery system. And it's the Legislature's 
responsibility to guide the industry and the people of 
California through this change. 

So, I certainly believe that there is a very 
strong and important- role for the Legislature in shaping this 


health care revolution. 

SENATOR ROSENTHAL: As a matter of fact, I really 
believe we would not have all HMO bills if the public had 
greater confidence in your oversight of HMOs. 

Do you agree to that? 

MR. BISHOP: I share your concern. I believe 
that the managed care industry, in order to survive, has to have 
the confidence of the public, both in the industry and in the 

Since becoming Commissioner, I have taken a 
number of steps, I believe, to improve the Department's 
oversight of the HMO industry. I don't believe we're done, but 
I believe we are moving forcefully in the right 

SENATOR ROSENTHAL: Let me just deal now with the 
DOC's ombudsman program. I understand that you're in the 
process of hiring an ombudsperson as required by my bill, SB 
1936. I'm disappointed that this consumer protection position 
is still vacant. That was last year's bill. 

I have two questions for you about the DOC 
ombudsperson. At your insistence, my bill deleted the duties of 
ombudsperson and left the duties to be determined by the 
Commissioner. My bill called for the ombudsperson to: first, 
oversee DOC's 1-800 consumer hotline to help resolve complaints; 
two, counsel and enrollees on their rights and responsibilities; 
help enrollees navigate through the HMO grievance systems and 
the DOC's appeals process; and distribute grievance system 
materials developed by HMOs and DOC; and coordinate with other 


government and private health care ombuds programs. 

What duties do you intend to assign the 

MR. BISHOP: Well, I am disappointed that the 
position is not filled. We took every step we could to fill it. 
We circulated a job opportunity bulletin, and we did receive a 
very small number of applicants. 

Rather than do the expedient thing, which would 
be to fill the position from those applicants, in looking at 
their qualifications, I thought it was important to get somebody 
who was fully qualified for that position. 

So, we rewrote the job opportunity bulletin, 
recirculated it, expanded the classification in which we were 
making eligible to apply to this position. So, I wanted to make 
sure that we were getting the best possible person so that I 
could carry out your intent in creating this ombudsperson 

Since becoming Commissioner, I have made the 
handling of consumer complaints one of my top priorities in the 
health care area. We've taken number of steps to improve the 
way the Department handles those complaints. 

The ombudsperson I see as somebody who will not 
duplicate the existing consumer services unit that we have, but 
somebody who will assist consumers and enrollees in dealing with 
the plan's grievance system and with the Department's handling 
of consumer complaints. Somebody who can break through problems 
when they arise in our own consumer services unit. 

And one other thing that I think is important is. 


I think people ought to know more about the Department of 
Corporations and their handling of consumer complaints. I see a 
role for this ombudsperson in spreading the word, in educating 
consumers about our 800 number and when to access it, and what 
it can do for them. 

SENATOR ROSENTHAL: There was nobody in the 
Department that was concerned about consumer affairs that you 
could have assigned to that ombudsperson' s job? 

MR. BISHOP: Well, we have a small department. 
And I was focusing my resources on speeding up our handling of 
complaints, because we did face a big backlog when I came into 
office, and adding resources to processing those complaints. 

Frankly, I thought we would get the position 
filled on the first go around with the job opportunity bulletin. 
I misjudged that. I thought we would get the right person. 

And I could have appointed somebody out of that, 
but I wanted to respect your intent and fill the position with 
the best possible person. 

SENATOR ROSENTHAL: You know, the Department of 
Health Services, the Department of Insurance, and the Department 
of Aging direct their ombudsperson to advocate on behalf of 
consumers . 

In contrast, last year when you opposed my bill, 
you did so because you objected to being an advocate for 
enrollees. I disagree with that position. I think that 
California needs an HMO ombudsperson who will advocate on behalf 
of consumer interests. 

Will you direct your ombudsperson to be a 


consumer advocate? 

MR. BISHOP: Well, as a regulator of the health 
plans and in handling these complaints, we have to get both 
sides of the story. 

We get complaints. They come in. We have to 
look at what the complainant is saying, and then we have to go 
and find out the story from the plan. Then we have to look at 
the law. We sometimes will need to consult with medical 

It is a process that we have to be fair to both 
the enrollee and to the plans. 

I do believe that the ombudsperson can advocate 
for the consumer in terms of negotiating through this process, 
so that they understand how to make the system work for them. 
But we do have apply the law, and apply the law fairly, and 
evenly, and as balanced a manner as we possibly can. 

CHAIRMAN LOCKYER: Senator, let me interrupt on 
this point. 

So, it's your understanding that the law requires 
you to be more adjudicatory when complaints come in rather than 
an advocate for any party? 

MR. BISHOP: I believe that the law, the 
Knox-Keene Act, which is the law that regulates managed care 
plans in California, is there for the protection of consumers. 
So, in making decisions, I believe that the law is for consumer 

But in handling complaints, we have to look at 
the complaints, and look at how the plan has responded to this 


individual's situation, look at the medical facts, and look at 
what the law requires the plans to do, and make a decision about 
what we think the right result should be. 

CHAIRMAN LOCKYER: If I understand that, you have 
specific complaints where you really are more of a judge, and 
general responsibilities under Knox-Keene that are consumer 

MR. BISHOP: Well, I think the law is there for 
the protection of the consumer. 

When we get these complaints, you know, we look 
at whether — and we interpret the law with that frame of 

CHAIRMAN LOCKYER: Do you care about consumers? 

MR. BISHOP: I absolutely care about consumers. 
Every day I read personally complaints from consumers. I get 
calls at home from consumers. 

CHAIRMAN LOCKYER: Is your number listed? 

MR. BISHOP: You don't want to know. No, I do 
get calls at home. I talk to my people late at night about 
consumer complaints. 

CHAIRMAN LOCKYER: So, you think this is an 
active part of your responsibilities? 

MR. BISHOP: I believe it is very important for 
me to understand how the Department is doing its job, how we are 
serving the people that we are, I think, by law required to 
serve . 

And you know, these complaints, when you read 
them every day, you realize the magnitude of the responsibility. 



1 SENATOR ROSENTHAL: A bill which I carried in 

2 1995, SB 689, directs the DOC to investigate and take 

3 enforcement action against HMOs in response to enrollee 

4 complaints. That's the law. 

5 In your information submission to this Committee, 

6 you've indicated that, quote, "Enforcement actions taken by the 

7 Department which are based on a single incident are the 

8 exception rather than the rule." 

9 In other words, you have refused to impose 

10 penalties in response to individual consumer complaints, no 

11 matter how egregious the case. I'm troubled by your 

12 enforcement policy in light of the serious nature of consumer 

13 complaints that I have received, and that have been reported in 

14 the press, and that we have reported to you. 

15 MR. BISHOP: Senator, I believe that I' have 

16 personally directed that complaints that have come to the 

17 Department of Corporations that have come to my attention, I've 

18 directed that they be referred to our enforcement division. 

19 I believe that our recent enforcement actions 

20 were generated in part by individual complaints that arose with 

21 respect to a plan. That's what sparked our initial 

22 investigation in which we sent out on-site investigators to 

23 follow-up on a number of individual complaints. 

24 Then we took a very stern enforcement action 

25 based upon those consumer complaints. 

26 What we're looking for is not only the individual 

27 case, but we're looking for systemic problems. We have to make 

28 decisions about taking enforcement action about the severity of 


the violation, the probability that we'll succeed, the amount of 
resources that we have available for enforcement. 

I will not hesitate to take action in the 
appropriate case based on an individual consumer complaint. 

SENATOR ROSENTHAL: Is it your position that none 
of the individual complaints that have come in on your watch 
have been serious enough to warrant DOC imposing a penalty? 

MR. BISHOP: No, Senator. I believe that the 
recent enforcement action that we took against Western Dental 
arose directly from individual complaints that came to my 
personal attention. 


MR. BISHOP: Yes, Western Dental plan. 

CHAIRMAN LOCKYER: Is that the one in the 
Sacramento area? 

MR. BISHOP: It's statewide. 

CHAIRMAN LOCKYER: If it's the one I'm thinking 
of in Sacramento, it's junk. They ought to be out of business. 

SENATOR ROSENTHAL: There have been no penalties, 
though, against HMOs for serious — 

MR. BISHOP: Senator, in the case of Western 
Dental, individual complaints came to my attention. I directed 
my enforcement staff in the fall of 1996 to commence an 
investigation which involved hiring a dental consultant and 
following up on on-site investigation. 

We worked that case for seven months to get the 
evidence in order. Then I filed a civil action against the 
plan, seeking to place the plan into receivership and a $3 


million fine. That is a substantial fine that arose out of 
individual complaints. 

SENATOR ROSENTHAL: Have there been none in 
health care HMOs that would require a fine? 

MR. BISHOP: The Western Dental case is a case — 

SENATOR ROSENTHAL: Aside from dental. 

MR. BISHOP: There have been other cases that I 
referred to enforcement to get their opinion on whether to take 
action. Based on their advice, I have decided not to take 

I certainly believe that there will be additional 
enforcement actions. 

I do have to say that these -- to bring an 
enforcement action takes quite a bit of investigation to make -- 
to build the evidence to bring the case. It does take some 
time, and I've only been in office less than a year. 

SENATOR ROSENTHAL: The next question, your 
predecessor, Commissioner Mendoza, undertook a bold quality of 
care initiative which seems to have fallen by the wayside under 
your leadership. 

As you know, part of the public concern about the 
DOC is that it doesn't do enough to ensure that HMOs provide 
quality health care. 

I noticed in the minutes of your HMO Advisory 
Committee meetings. Dr. Seymour Levine urging you ressurrect the 
quality of care initiative. 

Are you willing to commit to fully reviving the 
DOC quality of care initiative? 


MR. BISHOP: I am very concerned about quality of 
care, and I believe that's underlined some of the enforcement 
actions we've taken. 

In the case of the dental care area, I just 
received a couple of weeks ago a report from the subcommittee of 
my Health Care Advisory Committee on quality of dental care. 
Based upon that report, I've called for a public hearing to be 
held at the end of this month on that quality of care report. 

I'm very interested in the quality of care issues 
because I believe that's central to the Knox-Keene Act. 

Force, the Governor's Office has agreed to recommend that my 
bill, SB 406, my bill to remove HMO from DOC jurisdiction to a 
new HMO board in the Department of Consumer Affairs, should be 
subject to a fast track review by the Governor's HMO Task Force. 

The Governor's position endorsing a fast track 
review is different from a position that you took in a letter 
sent to me, which I understand was sent by mistake. 

For the record/ do you confirm the 
administration's position on SB 406 is that it should be subject 
to a fast track review by the HMO Task Force? 

CHAIRMAN LOCKYER: Let me insert, that applies to 
whatever ideas there are about governance. It might not just 
be -- there's the Department of Insurance, and so on. There's 
various alternatives. 

MR. BISHOP: Let me say this. I respect the 
independence of the Task Force. It is a multi-member body 
appointed by both the Legislature and the Governor's Office. 


The Department of Corporations will do 
everything it can to support the activities of the Task Force, 
and to help them in reaching any of the conclusions or 
undertaking any of the research that they need. So, if they've 
made that decision, we will support it. 

CHAIRMAN LOCKYER: Has the Task Force addressed 
that? They've had one meeting so far and another one tomorrow, 
is it? 

MR. BISHOP: Day after tomorrow. 

CHAIRMAN LOCKYER: Have they made any 
determination as to their work schedule, or is that premature? 

MR. BISHOP: At this time, I think it's premature 
in terms of formal agenda action. The first meeting was really 
an organizational meeting. 

CHAIRMAN LOCKYER: Wrong answer. This has got to 
get done before August 15th. 

MR. BISHOP: Senator, I will do everything I can 
to make sure that that happens. 

SENATOR ROSENTHAL: My final concern — 

CHAIRMAN LOCKYER: The whole task may not be 
completed, we understand that, but the governance segment, we 
need to hear from you and the Task Force by the middle of 

MR. BISHOP: I understand that, and that's what I 
was trying to say. 

CHAIRMAN LOCKYER: On the same topic, it really 
raises questions about whether you're managing your 300 people 
when your deputy writes a letter objecting, or suggesting. 


different committee jurisdictions in the Senate. 

Sir, I don't give a damn what your opinion or 
your deputy's opinions are about what committee ought to hear 
what bills. That's our business; that's our job. And I deem it 
highly inappropriate for someone directly under your 
jurisdiction to be writing letters suggesting that the 
jurisdiction of various committees should be changed. 

MR. BISHOP: I understand that, and I will do 
whatever it takes to make sure that it doesn't happen again. 

CHAIRMAN LOCKYER: I talked to the Governor's 
Office about it, so I'm satisfied with their indications that it 
was inappropriate. 

But it raises a question of what kind of 
management you're providing for your appointees. 

SENATOR HUGHES: Mr. Bishop recommended — 

CHAIRMT^ LOCKYER: His deputy did. 

MR. BISHOP: Just as a point of correction, it 
was not an appointee. It was a line person. 


MR. BISHOP: No, it was not a CEA. 


MR. BISHOP: It was below. The letter was signed 
by a counsel in the Office of Policy, but not the CEA who was 
the head of the Office of Policy. 

CHAIRMAN LOCKYER: What was the gentleman's name? 

MR. BISHOP: Tim Laboss, but I don't way to say 
that — 

CHAIRMAN LOCKYER: What's his title? 


MR. BISHOP: I think it's counsel. 

I'm not saying that to diminish it. It was a 
mistake, and I understand your — 

CHAIRMAN LOCKYER: It was not a person you hired 
for that particular job. He was pre-existing personnel, I 

MR. BISHOP: Yes, and he was not a CEA. 

CHAIRMAN LOCKYER: The Governor's Office thinks 
he's CEIA. Maybe they need to find out he's not. 

MR. BISHOP: I'm sorry? 

CHAIRMAN LOCKYER: The Governor's Office thinks 
that he's CEA, because that's what they communicated to me. So, 
maybe they should specifically, Mr. Dunn, learn that he's not in 
that job and probably shouldn't be. 

SENATOR ROSENTHAL: I have one final concern, and 
that's regarding HMO mergers. 

Under California law, if two health insurance 
companies want to merge, the Insurance Commissioner must first 
find that the merger would not substantially lessen competition 
or create a monopoly. 

There's no comparable requirement in California 
law for HMO mergers, although in other states where HMOs are 
generally regulated by insurance departments, this model 
anti-trust test may apply. So, we seem to have loophole in 
California law with regard to HMO mergers. 

You've testified before my committee that you do 
not think the DOC Commissioner should have responsibility for 
HMO anti-trust issues. 


In contrast, the Attorney General's 
representative testified that the Department of Justice would 
not object to legislation increasing its responsibility for 
reviewing the anti-competitive impacts of HMO mergers if the 
Attorney General was reimbursed for review costs. 

Do you object to the Attorney General taking on 
this anti-trust responsibility? 

MR. BISHOP: I believe that the Attorney General 
and the U.S. Federal Trade Commission and U.S. Department of 
Justice already have this jurisdiction. 

In the case of the recent PacifiCare FHP 
transaction, that was subject to a specific second request by 
the Federal Trade Commission, and the Federal Trade Commission 
issued a letter closing the case without any action. 

During the pendency of that merger, I was in 
contact with the California Attorney General's office. And the 
California Attorney General's office also raised no objection. 

From my perspective, there are enforcement — 
competent enforcement agencies with jurisdiction over the 
anti-trust laws to address these issues. 

I certainly believe in working cooperatively with 
those agencies, and as I said, I was in contact, personally in 
contact with members of the Attorney General's staff during the 
pendency of the transactions. And then after the transactions, 
I met with members of the Attorney General's staff to discuss 
further their approach to anti-trust enforcement in California. 


SENATOR LEWIS: If your role relative to the 


mergers does not include looking into anti-trust matters, can 
you spell out for the Committee what your role as Commissioner 
is with regard to those mergers? 

MR. BISHOP: I think our responsibility is 
basically to look at whether or not the proposed transaction 
would result in a violation of the Knox-Keene Act. And in the 
case of the FHP PacifiCare transaction, what was actually going 
on was a transaction by the parent corporations of the two plans 
that we license. 

So, what I repeatedly made clear to the plans 
involved is that, just because a financial transaction, a change 
of ownership at the parent level was occurring, that there 
should be absolutely no negative impact on the enrollees of the 

Following our approval of the transaction, there 
was this change of ownership. However, the plans continue to be 
separately licensed and must continue to be operated separately 
until they get further approval from the Department of 

In looking at the mergers, we looked at issues of 
whether or not the plans would continue to provide accessible 
care, continuity of care, and quality of care. 

I would say with respect to these transactions, 
the PacifiCare and FHP transaction particularly, we were the 
last regulator in the nation to approve the transaction. The 
transaction had been reviewed and not objected to by the Federal 
Trade Commission. Seven or eight other states had approved the 
transaction, including the California Department of Insurance. 


We were the last regulator. 

In approving it, we were the only regulator to 
insist on specific conditions, which we call undertakings, by 
the plans to ensure that principle that I enunciated, that 
there 'd be no adverse impact on enrollees, would be maintained. 

SENATOR LEWIS: I wanted ask you, you brought up 
the case of Western Dental in terms of your enforcement action. 

How many subscribers does Western Dental have, 
and how many consumer complaints did you have against them? 

MR. BISHOP: We have — they have, I believe, 
230, 000 enrollees in the plan, and I can get you the exact 

We had actually last year a relatively small 
number of complaints that were filed against the plan. I think 
there was couple of reasons. One is our 1-800 number had only 
been in operation for part of the time. And our — it was not 
as well known amongst the public as it should have been. 

Nonetheless, based on the complaints that did 
come to our attention, we did start the investigation. 

SENATOR LEWIS: Do you have a rough idea of what 
the number of complaints would be? 

MR. BISHOP: It was, I believe, less than 20. 

SENATOR LEWIS: Less than 20 out of 230,000? 

MR. BISHOP: Enrollees, yes. 

SENATOR LEWIS: And that triggered an 
investigation which resulted in kind of the death penalty for 
the plan, I guess? 

MR. BISHOP: We looked at not only the 


investigation, but we went back and reviewed the medical surveys 
that we had conducted over the last several years. And what we 
found was basically a consistent failure to address deficiencies 
that the Department had noted. And it just became apparent to 
me that these deficiencies were not going to be corrected unless 
we took dramatic action to ensure that they would be. 

SENATOR LEWIS; What was the nature of these 
deficiencies? What was the most common complaint? 

MR. BISHOP: Well, there was a variety of 
complaints. There was bad care. People were being given dental 
care. They'd come in with healthy teeth, and they would be 
given fillings which they didn't need, and then they'd have 
problems with the fillings that they didn't need in the first 

There was excessive waiting times, both to get in 
to the chair, and once you were in the chair. People undergoing 
dental surgery were sometimes waiting for hours in the chair in 
the midst of surgery. 

There was a large number of problems like this 
that we identified, both in our medical survey and in our 
complaint investigation. 

SENATOR LEWIS: Did I read somewhere that one of 
the complaints was that they were performing too many procedures 
at one sitting? 

MR. BISHOP: Yes, it's not good dental practice 
to operate on all four quadrants of the mouth, and so some of 
that was occurring as well. 

SENATOR LEWIS: Any questions from Members of the 


Conunittee? Senator Ayala. 

SENATOR AYALA: Just one question. 

In my office I indicated that some of the 
complaints I was getting was that you were not aggressive enough 
with the violators. 

You indicated that you had a record of strong 
enforcement of the laws, HMOs and whatever. And the letter you 
sent to me, I don't recall what it said. Tell me again what the 
letter said in terms of how many of these people you have given 
a penalty fee and so forth. 

You indicated to me you had a strong record of 
doing that. 

MR. BISHOP: In the ten or eleven months that I 
have been Commissioner, I have fined and collected more in fines 
than any other commissioner in the last ten years. 

And I believe that the collection number is 
particularly significant because the plans are not putting up a 
fight. They realize that we have very strong cases. 

I have taken action against 80 plans for failing 
to disclose the 1-800 number that the Department operates. I 
feel that that is a particularly important violation, because 
what happens is, people don't know where to go when they have 
complaints. Then we don't get raw data to bring other 
enforcement actions. And since bringing that action, in the 
first wave of that action, which was in January, we saw the 
number of phone calls to our 1-800 number nearly double in 
February, which was a short month. 

I've also taken action against a plan, fined them 


$100,000 for a false and misleading advertisement in the Wall 
Street Journal. And while that fine was significant, perhaps 
more economically significant was that we made them print a 
retraction, and we delayed the start of their new medical 
savings account product for several months until they could 
straighten out their problems. That put them, obviously, at a 
competitive disadvantage because the medical savings account 
program is a limited time pilot program. 

SENATOR AYALA: What is the average tenure of a 
Commissioner of Corporations? 

MR. BISHOP: Off hand, I think it's two or three 
years. I haven't actually studied it, but that's my guess. 

SENATOR AYALA: How long have you been in the 
office now? 

MR. BISHOP: It's going on, I guess, eleven 
months . 

SENATOR AYALA: Eleven months, you have had more 
people subjected to fines than any other commissioner in their 
term of office? 

MR. BISHOP: Yes, Senator. And I've collected 
more money than any other commissioner. 

SENATOR AYALA: Thank you. 

SENATOR LEWIS: You mentioned that one of your 
priorities has been to try to do something about the backlog of 
consumer complaints. 

What success have you had with that? 

MR. BISHOP: When I came in, we had a backlog of 
complaints over 60 days that was in excess of, I believe it was 


1200. That concerned me greatly. So, what I realized we had to 
do is to expand dramatically the number of medical consultants 
available to review consumer complaints. 

Today we have more than eight times the number of 
medical consultants available to us than we did when I came into 

I also hired on a temporary basis administrative 
law judges to provide legal expertise, to review consumer 
complaints. We have cut the backlog of consumer complaints over 
60 days by over 70 percent in the time that I've been in 

We're still, in my estimation, not where we want 
to be . I want to have zero complaints over 60 days. We're 
getting closer, although with the 800 number, we're getting more 
people calling us, so we are somewhat working against ourselves. 
But my goal is to get to zero. I believe we've taken a lots of 
steps . 

One other thing we've done — a couple other 
things we've done. As I mentioned earlier, we have to get the 
plan's side of the story, and so, we used to give the plans, 
when I came into office, 20 business days to respond. I cut 
that back to 5 business days. 

Another thing we did is, we installed a high 
speed FAX machine to FAX our inquiries to the plans so that they 
couldn't say, "Well, it took a couple of days in the mail," or 
it didn't come, or whatever. So, were now FAXing those out, 
because I just think it takes too long to go through this 


I want — people cannot often afford to wait, you 
know, 90 or 120 days to get answers to their complaints. 

SENATOR LEWIS: This went back to the dental, 
that Western Dental situation one more time. 

You mentioned that it's bad dentistry to practice 
on four quadrants simultaneously, or at the same sitting. 

If you were a consumer, and you had dental work 
that needed to be done on three or four of the quadrants, and 
you told them that, because of employment concerns, or whatever, 
you wanted to get it all done in one day, should they or should 
they not accommodate you? 

MR. BISHOP: I'd have to consult with our dental 
expert on that question. I'm obviously not a dentist. 

In undertaking this investigation, we actually 
had six separate dental consultants. One was a dental 
consultant for our Enforcement Division, and then we had five 
separate dental consultants that advised our Health Plan 
Division in reviewing these situations. So, the conclusions 
that we reached were about medical dental quality of care, were 
conclusions that came from our dental consultants. And they 
represented both an academic and a practicing dental 

SENATOR LEWIS: Any other questions from Members 
of the Committee? 

Why don't we proceed with testimony. Anyone in 
the audience wishing to testify in behalf of Mr. Bishop? 

MR. THOMPSON: Mr. Chairman, Senators, my name 
is Steve Thompson. I'm representing the California Medical 



When you go through confirmation hearings, I know 
one of the tough things that everybody has to wrestle with is, 
how happy they are with the subject matter versus the quality of 
individual that comes before you for confirmation. 

I must tell you, I don't think that any 
organization outside of the California Medical Association has 
been more aggressive or critical in what we perceive as the 
general oversight of a changed managed care industry in 
California today. Those of you that sit on any of the 
committees in which legislation comes before you know that to be 
the fact. 

One of the ironies of the position that you have 
before you is that the total resources available for regulating 
full service health care plans, covering 17 million 
Californians, is slightly over $6 million. 

The Department of Health Care Services, to 
regulate Medi-Cal plans covering about 1.8 million recipients, 
spends $22 million annually. 

And the Medical Board, which licenses about 
70, 000 practicing physicians, spends physician fees in the 
neighborhood of $20 million. 

One of the glaring disparities, which we've tried 
to point out year after year in the budget, is that unless you 
increase the capacity, the resources for this most important, 
and probably today, largest industry in California, those who 
are nominated and those who criticize will continue to bring 
forth to you complaints of inadequate monitoring. 


SO/ in that regard/ I don't think the California 
Medical Association believes that the Department of Corporations 
has fulfilled that initial statutory charge, which you gave 
it — this legislative body created the regulation of the HMO 
industry out of abuses, unregulated abuses in the market place. 
So, until the resources are there to do the job, there will 
always be problems. 

Now, you must ask yourselves, is Mr. Bishop a 
qualified Commissioner to undertake this endeavor? In our 
opinion, he absolutely is. He's been in the job eleven months. 
He has disagreed with us on numerous occasions. To a 
significant degree, he's opened his door, and outside of the 
Blue Cross merger hearings that were generated by legislation, 
has called for the first public hearings on any financial 
transaction involving large California HMOs, and those are the 
two recent mergers. 

He didn't identify the fact that he carried 
through to completion the largest fine against an HMO for denied 
individual care, and that was the Harry Cristy case emanating 
out of the Take Care suit. 

He has implemented to fair degree, by virtue of 
the fines that occurred in regard to the nonplacement of the 800 
number, the grievance procedure. And the 800 number that they 
have that was in the response to Mr. Rosenthal's bill. And we 
think he shortened the timeframe to handle those grievances. 

Are there still problems with the management of 
HMOs? Absolutely, but until the resources are finally put in 
place for the State of California to carry this out, it's going 


to be always an uneven and inadequate enforcement provision. 

Further, we believe that Mr. Bishop brings to 
this job a sense of public service, which is very important for 
every appointee that comes before this body. We've found him to 
be honest, fair, open, and committed to the job that he is 
appointed to on a temporary basis, and would be appointed to on 
a permanent basis. 

In the final analysis, those criteria are the 
criteria that one should consider very seriously in approving or 
disapproving a public appointment. Too often in public service 
today, people don't come with those values, and subsequently, 
whether you agree or disagree with all of the issues that are 
carried out, those are the values that best serve the taxpayers. 

Thank you. 


Questions? Are there others? 

You can jump in at any time if something provokes 
you, but it's probably a good time just to let others say 
whatever they might. 

Others who wish to may any comment, please just 
come forward, either pro or con. 

MR. COURT: Thank you. I'm Jamie Court with 
Consumers for Quality Care, which is a consumer watch dog group 
interested in promoting the public interest in higher quality 
health care. 

We are here to oppose the confirmation of 
Mr. Bishop. We believe he's failed to enforce the state law 
regulating HMOs during his one-year tenure, and he must be 



What you have to remember about Mr. Bishop is, he 
has new enforcement tools. He is the first Commissioner with 
enforcement tools afforded him by the Legislature in 1995. And 
yet/ patients who have turned to him with life and death matters 
have found it a futile exercise, even when it appears that there 
are some violations of the Knox-Keene Act. 

Unlike Mr. Bishop's predecessor, the Legislature 
has, under Mr. Bishop's watch, established an 1-800 hotline. In 
fact, thousands of those complaints from consumers come in every 
month during his entire tenure. 

The consumer service hotline, just to give you an 
idea, received 6,714 calls in March of '97, 7303 calls in 
February '97. I believe it was slightly less before the 
beginning of the year, but still in the thousands, 3-4,000. 

Yet despite all the thousands of these complaints 
that flooded into the hotline each month, we have not seen one 
fine issued against an HMO for denial of treatment, a denial of 
treatment, which is the most common problem at an HMO today. 
Not the over-utilization that was involved in the Western Dental 
case, which, by the way, I think the action was taken about a 
week-and-a-half ago, so I commend the Committee for actually — 
I think these hearings helped force that action out. 

But in no case which has come before Mr. Bishop's 
desk has he seen fit, of these thousands of complaints, to levy 
a monetary fine against an HMO for a denial of care, denial of 
treatment, the rationing of care we see at HMOs. 

If it doesn't cost an HMO to deny and delay when 


the state regulator doesn't wield his fining and enforcement 
authority/ HMOs won't put up. They won't put up the care. In 
fact, HMOs are notorious for denying and delaying until it costs 
them something. 

On Mr. Bishop's watch, they've had a virtual free 
ride, given what's been coming in in terms of complaints. 

To give you some idea about the fines that have 
come into the Department, I think it's over a million dollars in 
fines. A half million of that was actually a fine issued by 
Mr. Bishop's predecessor in a single incident case, in a case of 
a little girl with Wilms tumor. 

An administrative law just subsequently affirmed 
that decision, and Mr. Bishop, actually a few days before the 
election, affirmed that decision as well. So, he collected that 
fine, but he did not initiate it, and that was for denial of 

The other fines, if you look at fines for not 
announcing the 1-800 hotline, amounted to, on average, of the 43 
plans fined, with the sum total of a half million dollars, maybe 
$10-11,000 each, except for one which had about a $40,000 fine. 
This is a slap on the wrist to HMOs. That the big ones today 
have literally a billion dollars in profit they're sitting on. 

Mr. Bishop's written response to this Committee's 
request for information reveals some very troubling things. 
That Mr. Bishop, according to the response, and hopefully he'll 
clarify a little later, that he has been unwilling to judge the 
merits of complaints and requests for assistance filed by the 
HMO consumers, despite the authority granted to the Commissioner 


under the Knox-Keene Act. 

I'm just going to quote from the Bishop 
administration correspondence to the Committee, which was in the 
public file, quote, "The Department does formally and publicly 
find whether a plan the Act, " referring to Knox-Keene Act, "or 
conversely, that a plan has complied with the Act," end quotes. 

Again, I think Mr. Bishop is trying to be quite 
impartial here, but contrast this with Mr. Bishop's mandate 
under the Knox-Keene Act. This was something that Mr. Rosenthal 
added in the '95-96 section to the Act. He says the 
Commissioner shall, as appropriate, investigate and take 
enforcement action against plans regarding complaints by 
enrollees and subscribers. 

Clearly, Mr. Bishop has not found it appropriate, 
but this was language that Mr. Rosenthal added during '95-96 
session that clearly grants the authority to the Commissioner to 
be someone who determines the merit of a complaint and issue 
fines when required. 

The Bishop administration has claimed, quote, "It 
is not a trier of fact, and the request for assistance process, 
the complaint process, is not judicial in nature. While the 
Department obtains and reviews a plan's response to an RFA, the 
plan is not accorded full procedural due process rights." 

In other words, the administration believes that 
the due process rights of the HMO are preeminent over the 
interests of the HMO consumer in need of state intervention. 
Yet, we have the Knox-Keene mandate. 

We believe this is a scandalous failure to 


enforce the current law. If the thousands of consumers who call 
the Department each month knew that the urgent help they sought 
from the state HMO regulator would be no more than discussions 
with the HMO, they would likely lose their trust in government 
to execute the laws that the Legislature enacts, such as 
Mr. Rosenthal's law. 

Without a cop on the beat ready to wield a club, 
really, this law is meaningless, particularly on the HMO beat. 

A parallel I have is, if you had a police chief 
whose department has never written a parking ticket or towed a 
car under this reasoning: a parked car in the middle of the 
road indicates to the chief insufficient evidence to demonstrate 
that the driver is in compliance with traffic laws, yet to fine 
to fine or tow that car would ignore the due process rights of 
the car's owners. 

When you look at the language of the response to 
consumers, and I think there is some here, you find that 
Mr. Bishop does not judge the merits of complaints, but simply 
says there is not sufficient evidence to find compliance with 
the Knox-Keene laws, that's it. 

This is the situation HMO consumers find 
themselves with Mr. Bishop's administration. 

Three other troubling aspects with the Bishop 
administration's written response to the Committee's request 
for information. One is, the law requires 60 calendar day 
processing of a complaint. Again, there is a little weasel 
clause in his or her discretion, so they can get out of it, but 
that was clearly the intent of the law, and it says 60 calendar 



The response provided by the Department shows 
that only about half the complaints to the hotline are resolved 
in the 60 day time period. Some take as many as 120 days. 
There's a woman who will testify later, it took seven months on 
an urgent request. People don't have this time to wait. 

In addition, when they get a response from the 
Department that the complaint is closed, basically all the 
response says is, there is no compliance, that they can't find 
compliance with the Act, not that noncompliance has some 
consequences. So, there's no real resolution for the patient, 
even though maybe the complaint is closed on the Department's 

In addition, the Bishop administration stated in 
correspondence that enforcement actions, administrative actions 
taken on a basic, simple, single incident would be the exception 
rather than rule. In other words, this is not going to be 
apparent in practice, yet the only fine issued for a denial of 
care is the half million dollar fine levied against FHP in a 
single incident case, in the case of a girl with Wilm's tumor 
who couldn't get access to treatment. 

So, the fine imposed in November of '94 by Mr. 
Bishop's predecessor was a fine that was contested two years by 
HMO attorneys. And still an administrative judge found that the 
fine was just, and Mr. Bishop affirmed it. 

The point here is, the pattern set by Mr, Mendoza 
was single incidents that were egregious would have a fine. 
Mr. Bishop seems to suggest they will not. 


Another troubling problem is, we've seen some 
very highly critical audits and surveys from the Department, and 
we have seen inaction following those audits. Two good examples 
of some high profile cases were the Health Net cases, cancer 
care denials. The Fox v. Health Net case, deMeurers v. Health 
Net case. One was on the cover of Time magazine. Yet, the 
lawyer in the case, Mark Hebler, claims he's never heard from 
the Bishop administration. 

In the response, the correspondence to the 
Committee, the Bishop administration says that it did do an 
audit after the Health Net cases and found, quote, "The Health 
Net does not adequately monitor the authorization denial for 
bone marrow." And what the Department simply did was, quote, 
"Required Health Net to correct these deficiencies." No fine. 

We find there's a real problem here. No fine was 
issued. And that's what's going to matter to a Health Net, to a 
cost cutting HMO. 

So, not even in following a complaint, but in 
following a critical survey, medical survey, we have not seen a 
fining authority used. 

A classic example of this is in the handling of 
Kaiser, the state's largest HMO. There was a highly critical 
audit in August of '96. The Department's auditors found 
systemic problems. Among the findings were, medical decisions 
do not appear to be, quote, "independent of fiscal and 
administrative considerations, " which is a violation of the 
Knox-Keene Act. They found clinical review nurses had the 
authority to overrule physician decisions, basically 


administrators overruling doctors, again a violation of the Act. 

And in addition, they found 25 percent of all 
emergency room treatment for Kaiser members appeared to be 
denied unreasonably based on administrative concern, money 
rather than medicine. 

To date, we haven't seen a sanction from the 
Bishop administration. 

CHAIRMAN LOCKYER: Who did that work? 

MR. COURT: That was the Department of 
Corporations audit. 

CHAIRMAN LOCKYER: Their own auditors concluded 
that, what was the 25 percent? 

MR. COURT: That 25 percent of all emergency room 
treatment for Kaiser members outside of the network appeared to 
be unreasonably denied, based on the mechanisms in place for the 
denial. Which is, an emergency room doctor would call a Kaiser 
nurse on the phone, a 1-800 nurse from Hell, and she would deny 
that procedure. That shows there's not a medical chain of 
authority but a money chain. This was in August, '96. 

And at the time, as many headlines showed, 
Mr. Bishop's administration said in six months, which would have 
been February, there 'd be some response formally from the 
Department after investigating further. We haven't seen a 
response . 

What we have seen, however, is other regulators 
jumping into the fray on the same issue. Texas regulators 
issued a million dollar fine against Kaiser in a case -- a 
series of wrongful death cases where there were deaths due to a 


lack of safe emergency care. 

In California/ federal regulators threatened pull 
Kaiser's funding because of a problem with the emergency care at 
the Richmond facility, where some patients had died. 

And just last week, consumer advocate Ralph Nader 
joined with our group in calling upon Mr. Bishop to freeze 
Kaiser enrollment until these problems identified in the audit 
and by these other regulators are dealt with. 

We haven't had a response yet, but the problems 
identified were very similar to the problems identified in this 
Kaiser audit. So, other regulators had identified similar 
problems in August of '96 that Mr. Bishop had. Informed Kaiser 
that the state would take some action in six months. The 
deadline's passed. We haven't heard a public word. 

The last three things I'll mention just real 
quickly, talk to what we believe is an unfair bias towards the 
HMO at the expense of the HMO consumer in Mr. Bishop's 
administration. One is that he has appointed as his top 
deputy. Assistant Commissioner, a former HMO executive. A man 
by the name of Gary Hagen, who served from '88 to '91 as 
Foundation Health Corporation's chief lobbyist in Sacramento. 
He's responsible for the day-to-day oversight of managed care 
plans. This is an HMO executive. 

In addition, he was responsible for the oversight 
of the merger of his former employer, which was Foundation 
Health, and Health Systems International. And myself and some 
other consumer advocates wrote a letter asking for Mr. Hagen to 
recuse himself from the deliberations. Mr. Bishop failed to 


reply to our letter voicing concerns. 

We thought it was improper, but it pointed to 
larger problem at the administration, that to a certain degree, 
the people there are foxes guarding the hen house. This is an 
HMO executive responsible for oversight. 

CHAIRMAN LOCKYER: This is the letter of February 
7th you're referring to? 

MR. COURT: I believe it's about that timing. 

CHAIRMAN LOCKYER: You wrote it to Mr. Hagen 
asking that he recuse? 

MR. COURT: And we cc'd Mr. Bishop and a few 
others as well. 


MR. COURT: Mr. Rosenthal as well. 

CHAIRMAN LOCKYER: That's the letter we're 
talking about. 

MR. COURT: We also believe Mr. Bishop has failed 
to adequately scrutinize the recent wave of mergers, which, by 
the way, will place one out of every three Californians — 
excuse me, which will place 70 percent of Californians in one of 
three HMOs: Kaiser, PacifiCare, or the new Foundation Health 

He ignored the advice of the entire medical 
community. At the time, the California Medical Association was 
opposed to the mergers, the California Nurses Association, 
consumer groups, and our concerns were largely ignored. He 
approved both deals. 

In fact, he was the only regulator in the whole 


scenario to actually be able to look at quality. The others 
looked at anti-trust concerns. We believe he had the obligation 
to look at quality, and that there were some good cases that 
such large HMOs could unduly leverage the doctor to such low 
reimbursement rates, patients couldn't get adequate care. 
Doctors believe that. 

Mr. Bishop took -- allowed these mergers anyway. 

The last concern we have is about a decision made 
by Mr. Bishop last summer, after he took office, in which he 
exceeded regulatory authority to, quote, "evaluate managed care 
plans throughout the state for compliance with the Knox-Keene 
regulations" to a privately funded group. It's a private 
industry accrediting group called JCHO, the Joint Commission on 
the Accreditation of Health Care Organizations, which has been 
criticized for very shoddy hospital audits, for charging 
hospitals accreditation fees, and for an industry-dominated 
governing board. Twenty-one out of twenty-eight members of this 
JCHO Board of Directors are industry representatives who pay 
$20,000 a year for a seat. And Mr. Bishop allowed them to be a 
contractor for the state to do medical audits. 

A July, '96 audit of JCHO by the consumer group 
Public Citizen found that JCHO, quote, "views hospitals not as 
entities to be regulated, but as customers to be serviced and 
satisfied. " 

The other contract which Mr. Bishop gave at the 
same time was quite interesting because it was to CMA-af filiated 
group, a California Medical Association affiliated group. So, 
when the California Medical Association comes up and supports 


Mr. Bishop's confirmation, after many of their representatives 
vehemently opposed these mergers, I hope you put it in the 
context of the fact that the CMA is a subcontractor of the 
Department of Corporations. They were hired as the Institute 
of Medical Quality. 

CHAIRMAN LOCKYER: You provoked Mr. Thompson. I 
haven't seen that happen in at least 12 years. 

SENATOR BRULTE: Mr. Thompson, are you a pig at 
the trough? 

[Laughter. ] 

MR. THOMPSON: I want to point out that it's a 
separate subsidiary, not controlled by us. 

Secondly, I don't think anybody's ever accused me 
of a conflict, sir, in my whole life. 

[Laughter. ] 

SENATOR BRULTE: Let me congratulate the witness. 
[Laughter. ] 

MR. COURT: It's a clear revenue raiser for the 
CMA. It was a CMA initiated group. 

CHAIRMAN LOCKYER: Do you know it's a separate 

MR. COURT: My belief, and we can confirm it, is 
it's a CMA Founded group, and that the revenues. 

CHAIRMAN LOCKYER: What's it called? 

MR. COURT: I think it's called the Institute for 
Medical Quality. 

CHAIRMAN LOCKYER: What did both of those groups 


wind up with, what kind of compensation? Do you know? 

MR. COURT: I don't know. I'm almost done, but 
it was the two subcontracts to finish these audits. 

Well, generally, I think you get the gist of my 
comments, which is that we need a states watch dog with some 
bark and some bite. 

CHAIRMAN LOCKYER: You heard Mr. Thompson 
indicate that the real problem, in his view at least, is 
systemic, not competence, honesty, or any quality of the 

MR. COURT: And I wouldn't fault the competence 
or -- I wouldn't fault the honesty of Mr. Bishop. 

What I would say is that consumers who turn every 
month to the Department in the thousands need someone with a 
consumer perspective, a watch dog, to not evenly balance the 
interests of the HMO and the consumer, but when there is an 
abuse, to say there's a violation of law, and to be trier of 
fact, to judge complaints on their merits, and to take action. 

So, Mr. Bishop has, to his credit, held some 
hearings on mergers, made the process more open. 

What I'm concerned about is, given all these new 
tools that the Legislature empowered him with, he has not used 
them in a way that an appointee who looks after the consumer, 
and looks after enforcing the Knox-Keene Act would. 

CHAIRMAN LOCKYER: Got your point. Thank you. 

Let's ask you to respond so some of the things 
you just heard. 

MR. BISHOP: There was a lot there. 


Going through my notes, I guess I would say that 
I am willing to take action on consumer complaints. And I think 
there's a misunderstanding about the complaint process, and 
perhaps a misunderstanding that might actually — which I 
believe will hurt consumers. 

We are not, in the initial phase of handling 
complaints, affording either the consumer or the plan full due 
process rights. We are not holding administrative hearings. 

We could do that if the Legislature gave us the 
authority. I would fear that that, perhaps, would slow down the 
process immensely. 

In crafting -- when I came on, I looked very 
carefully at how we responded to consumer complaints. And what 
I wanted to do was not give something that would jeopardize the 
consumers. If we found that perhaps there wasn't a violation, 
that would prejudice the consumer in pursuing their individual 
private action, whether it's civil or an arbitration, in that 
they'd have something formal from the Department which was not 
after a full due process hearing. 

Complaints do get referred to our Enforcement 
Division. And when they go to our Enforcement Division, if we 
bring a case, such as the case we brought against Western 
Dental, in that case we chose to make it a civil case, and so we 
took it to court. And there it will be heard and adjudicated in 
a formal due process way. 

I'd like to speak — 

CHAIRMAN LOCKYER: What do you audit? The Kaiser 
audit that suggested that 25 percent of the emergency room 


referrals were really cost driven in refusal of treatment? 

MR. BISHOP: I have serious concerns. The 
medical survey of Kaiser came out during my tenure. I think it 
spoke to the quality of the medical the medical survey. 

I have, in no uncertain terms, made it clear to 
Kaiser, not only were they required to submit a plan of 
correction, but that we would be back. And if those 
deficiencies are not corrected, there are going to be serious 
consequences for Kaiser. 

CHAIRMAN LOCKYER: When do you identify the 

MR. BISHOP: We identified them as part of our 
routine medical survey process. 


MR. BISHOP: Well, the report came out in August 

of 1996 


CHAIRMAN LOCKYER: How long do they get to 

MR. BISHOP: We were originally scheduled to come 
back in August of this year, and I moved that forward to July of 
this year. 

In the last week alone, I've had three separate 
telephone calls to the Chairman and CEO of Kaiser, reiterating 
the fact that these deficiencies have to be fixed. 

I'm also concerned with Kaiser's handling of 
complaints. A few months ago, I called Dr. Lawrence to my 
office in L.A. to personally discuss with him my concerns about 
the way they're handling their grievance process. 


CHAIRMAN LOCKYER: What sort of problem did you 
think was occurring with their grievance process? 

MR. BISHOP: There were problems that we 
identified in our medical survey report that had to do with 
whether or not they were following the complaints in terms of 
assessing the quality of care. 

In our own shop, I thought that they were — our 
handling of Kaiser complaints was taking an inordinate amount of 
our internal resources, and that's a problem. 

I wanted to speak a minute about the Assistant 
Commissioner for Health Care, and I want to make one thing 
absolutely clear. He is an assistant. I make the decisions. 
Mr. Hagen does not make the final decisions; I do. 

CHAIRMAN LOCKYER: What were his principal 

MR. BISHOP: Mr. Hagen, well, he oversees the 
Health Plan Division and reports directly to me on the 

He does not make any major policy or operational 
decisions without my approval. I mean, they're all my 

CHAIRMAN LOCKYER: So, you don't think his 
history of employment with one of the large plans prejudices his 
recommendations or administrative work? 

MR. BISHOP: Absolutely not. He — when I came 
in office, the position of Assistant Commissioner had been 
vacant for more than a year. I wanted to get someone who had 
experience in the health care industry. He did have experience 


in the managed care industry, but he also had experience with a 
large not-for-profit home delivery system in the Washington 
State area. 

I value his expertise in the health care 
industry, but the decisions are mine. 

CHAIRMAN LOCKYER: What about these two 
subcontractors, JCHO and IMQ? What's the story there? 

MR. BISHOP: I think they illustrate what I was 
trying to say in my opening remarks. Almost any decision 
invites some comment and criticism. 

The Department of Corporations formerly had an 
internal requirement, an internal goal, of doing medical surveys 
within three years. Due to legislation, that became a statutory 
responsibility about the time I came into office. So, one of my 
top priorities -- we had never met that goal — was to get us on 

I knew that we did not have the internal 
resources, and we went through a process that actually began 
before I got there of soliciting proposals. And when I came on 
board then, it was my responsibility to make a decision on a 

What he characterizes as two contracts is what I 
view as a joint contract between the JCHO, Joint Commission on 
Accreditation of Health Care Organizations and the Institute for 
Medical Quality. 

When I made that decision, I think that decision, 
I got more complaints from the managed care industry than almost 
any decision I've made. At the same time, I got complaints from 


people with a different viewpoint. 

CHAIRMAN LOCKYER: Welcome to the middle of the 
road. You get hit by traffic going both directions. 

MR. BISHOP: So, it's been one of the interesting 
aspects of the job. I feel it was the right decision to make 
because it's important — 

CHAIRMAN LOCKYER: What do they do for you? 

MR. BISHOP: Well, that's the other thing that's 
important. They do not take responsibility for the medical 

They provide medical specialists to do the 
on-site portion, go out to the health plans, review the patient 
charts, and do the interviews. 

But the final product is the product of the 
Department of Corporations and staff within the Department of 
Corporations. That's very clear in the contract. 

Another thing that's very clear in the contract 
is, there were strict conflict of interest requirements and 
standards that were built into it. Again, I got criticism from 
the managed care industry, and you've heard some criticism here 

CHAIRMAN LOCKYER: Do you, Mr. Bishop, not have 
staff expertise within the Department that can do that survey? 

MR. BISHOP: We have staff expertise. We don't 
have enough of it. 

CHAIRMAN LOCKYER: That's what I mean. You're 
still paying for it. You're contracting out, and you're paying 
for it, or internalizing and paying for it? 



CHAIRMAN LOCKYER: Is it flexibility that you get 
from the contracting out? What's the point? 

MR. BISHOP: It does give us flexibility in 
contracting out, because we do -- the cycle, the three-year 
cycle is not exactly even, because it depends on when the plan 
was licensed, and things like that. 

The other thing that I thought was particularly 
important was that it allowed us to fire the contractor if they 
didn't do a good job. And I made that very clear, that I was 
interested in performance, and I will not renew that contract 
unless they do a good job. We're in the process now of 
evaluating, really, the first almost year's performance on that 
contract . 

CHAIRMAN LOCKYER: How much do you spend on that 

MR. BISHOP: I'd have to give you the number. I 
don't want to give you the wrong number. 

CHAIRMAN LOCKYER: When you get it, let us know, 
Ms. Michel. 

Were there other points Mr. Court made that you'd 
wish to respond to at all? 

MR. BISHOP: I wanted to address the Carly 
Christie case, because that was one that I was involved with 
before I came to the Department of Corporations as Deputy 
Secretary and General Counsel to the Business, Transportation 
and Housing Agency. 

After I got there, the decision to approve the 



fine rested with me. And I got a tentative decision, is the way 
it works in the administrative law world is, a tentative 
decision is sent to me. I could have not made the decision to 
uphold that, and I would not have, had I thought it was the 
wrong thing to do. 

So, there was about 20 volumes of testimony that 
was taken in the administrative law case. I read all 20 volumes 
before I reached a decision. 

When I made the decision, I knew that it was the 
right decision to make. I don't think that will be the last 
single incident case. 

CHAIRMAN LOCKYER: You're going to wind up on a 
Court of Appeals if you have that sort of monastic tendency to 
read 20 volumes. 

MR. BISHOP: Well, I just — I don't feel I can 
fine somebody $500,000. 

CHAIRMAN LOCKYER: You're right. That's a good 
thing to do, be thorough. 

I'm looking at the budget proposal for the 
Department, because at least a number of the comments seem to 
suggest that there are problems with inadequate resources that 
produce inadequate enforcement and oversight. 

I note that the general budget is reduced by 47 
positions. Has that changed at all during the course of budget 
subcommittees here? 

MR. BISHOP: I'm sorry, the number was? 

CHAIRMAN LOCKYER: It says 47 fewer positions, 
3 . 6 million cut. 


MR. BISHOP: Oh, yes, that relates to the fact 
that we're losing oversight of the credit unions, industrial 
loan companies. 

CHAIRMAN LOCKYER: So, it's not a cut in your 
like health oversight? 

MR. BISHOP: Right. 

CHAIRMAN LOCKYER: That seems to be frozen, same 
level as current year. 

Health care program, is that the piece that does 

MR. BISHOP: Right. We actually ~ 

CHAIRMAN LOCKYER: Eighty-three positions? 

MR. BISHOP: There's a Finance letter that we 
have submitted which would Augment our spending authority in 
connection with the document imaging program. 

CHAIRMAN LOCKYER: Is that part of this oversight 

MR. BISHOP: Well, we have, I believe, been 
criticized, rightfully, for not being as accessible to the 
public as we could be. It's an issue that I've discussed with 
consumer groups, and we get — we have now on file 17 million 
documents. We get 3 million new documents every year that are 
filed with us. 

We have a paper problem. By law, we have to make 
many of these files available to the public. 

I have a concern with the security of those files 
and with the accessibility. If we lose those files, you know, 
through a fire or just losing them, they're gone because we 


can't afford to make copies. 

CHAIRMAN LOCKYER: So, you've submitted a Section 
28 letter, or whatever the right number is in this instance, for 
how much money? 

MR. BISHOP: Well, the total project, which would 
cover all of our programs, is 3.8 million next year, and would 
be for a document imaging project which would convert our 
documents and all our new filings to CDs, and then would be 
software program that would allow us to track and identify all 
the filings. 

I think that will significantly enhance our 
ability to provide the public with information about all the 
programs that we administer. 

CHAIRMAN LOCKYER: We're currently dealing with 
the Department of Forestry's deficiency, and it sounds like we 
might also save some trees by helping you with this. You may 
now get added to that proposal. 

What other questions from Members? 

Senators, we can take more testimony, unless 
there's someone that has one that wants to pop up here. Okay, 

MR. OWENS: My name is Howard Owens. I'm the 
President of Health Access of California. 

In Health Access, we're composed of over 200 
consumer groups. In the past year, we've been actively engaged 
in organizing HMO enrollees so that they can take action within 
their own HMOs. 

We've found that the Calif ornians that we've 


worked with have been very concerned about the lack of 
enforcement and lack of aggressive representation for them in 
the health care field. 

As a result of this, we've prepared a list of 13 
proposals that are in the Legislature today, 13 separate bills, 
that we refer to as the Patients' Bill of Rights to try to 
protect people. 

We've also signed on and are working with a 
number of other people, including Senator Rosenthal, on other 
areas to try to correct what we consider the abuses within the 

Health Access of California is dedicated to 
universal access to quality affordable care for all 
Calif ornians . We've been dismayed to find out that even 
Californians who have health benefits have not been able to get 
the care that they need when they need it. 

We think that an effective enforcement agency 
should be there alongside consumers to fight with them to get 
the care that they need, and that the tools are there for this 
regulatory agency to do that. 

We believe that the Department of Corporations 
under Commissioner Keith Bishop has failed to do this, and for 
this reason we oppose his confirmation. 

CHAIRMAN LOCKYER: Mr. Owens, is it his fault, or 
is it the Governor's fault or responsibility, and the 
Legislature's fault and responsibility for not — 

MR. OWENS: Well, I believe, from what I've heard 
today -- let me tell you that we did a radio show in San 


Francisco about HMO abuses. Within eight hours, we got 188 
complaints/ which were forwarded, by the way. 

Now, whose fault is it? I don't know that I'm 
really capable of answering that. 

CHAIRMAN LOCKYER: It's hard for us to turn 
somebody down who may be dedicated and competent if he's got an 
impossible job. 

MR. OWENS: But let me tell you what I've heard 
coming through today. I've heard a plea from Senator Rosenthal 
and others that the Commissioner in the health care field ought 
to act as an aggressive representative of consumers. 

I have not heard the Commissioner accept that 
responsibility. I've heard him talk about an even-handed -- 

CHAIRMAN LOCKYER: That's handling individual 
complaints that come in. 

MR. OWENS: Yeah, but we think that the 
Commissioner ought to be an aggressive advocate for patients. 

We believe that big corporations like Kaiser and 
Health Foundation, and that sort of thing, have enough 
resources, enough strength, to pretty well look after 
themselves. Where we really need aggressive representation is 
from the Commissioner. ■ 

I haven't heard him accept that here today, and 
I've listened very, very carefully. And I think that's a 
responsibility he has to accept if he's going to be a 

SENATOR BRULTE: Question. Do you think we ought 
to outlaw HMOs? 


MR. OWENS: Oh, no. I think HMOs are a very good 
way to deliver services. I just think that they ought to be 
regulated so that they handle their job in the best interests of 
the consumer. But I really think HMOs is a good way to go. 

CHAIRMAN LOCKYER: Thank you. Other comment? 

None of my friends like you, Mr. Bishop, or your 
job, or something, or your boss. Some problem you've got here. 

MS. CAPELL: Beth Capell on behalf of the Service 
Employees International Union. We represent 300,000 workers in 
California, including 100,000 health care workers, including 
many in managed care. 

I want to just make a few additional points. In 
1996, SEIU, along with many community groups, elected officials 
and others petitioned the Department of Corporations to examine 
the massive restructuring that's going on at Kaiser now. 

Kaiser looks like it's closing its Oakland 
facility. It's closing Kaiser Morse Avenue here in Sacramento. 
It's closing Kaiser Sunset, and — 

CHAIRMAN LOCKYER: Your letter says that their 
comment was they weren't authorized to seek public input? 

MS. CT^ELL: That's correct. 

CHAIRMAN LOCKYER: Can I ask him about that? 

MS. CAPELL: Yes, please. 

MR. BISHOP: I believe that we — I have sought 
public input on a number of times under the Knox-Keene Act, 
including in connection with the mergers, and in connection with 
our dental quality of care survey. I'm going to have a public 
hearing in May. 


When Kaiser files their — the exact details of 
what they're proposing so that there can be informed public 
comment/ I intend to get public input, and I intend to hold 
public hearings. 

MS. CAPELL: This is news to us. 

CHAIRMAN LOCKYER: I guess you thought that the 
petition wasn't the right timing? Is that how that worked? 

MR. BISHOP: At the time, I thought it was 

MS. CAPELL: We have been in negotiations 
directly with Kaiser over closure of the facilities. We are 
participating currently in conversations, not only with Kaiser, 
but with successor facilities. 

And we find it strange, to say the least, that we 
could be months into conversations with Kaiser about potential 
closure, impacts of closure on quality of care on consumers and 
workers, and have Mr. Bishop regard it as premature to hold 
public hearings. 

CHAIRMAN LOCKYER: It's one thing to be 
negotiating with the employees about employment and impacts on 
their organization or closures. And another, I guess, to have 
some kind of approval from the state. 

Is there a point at which they have to come to 

MR. BISHOP: They cannot make a material change 
in their plan operations without filing a notice and getting 
approval from the state. 

CHAIRMAN LOCKYER: What would happen when they 


file that notice? 

MR. BISHOP: I would at that point make the 
information -- it would be public information, and I would 
solicit public input and hold public hearings. 

I have myself been in discussions with Kaiser 
about their -- what they are thinking about doing. But at this 
time I don't have the details of it, and so, I think it's 
important to have exactly what they're proposing to do before 
the Department, before we can have a meaningful public hearing 
on it . 

CHAIRMAN LOCKYER: Senator Brulte, on that point. 

SENATOR BRULTE: I want to ask the witness, did 
you ask the Commissioner to hold — 

MS. CAPELL: We asked the Commissioner, yes, to 
hold public hearings or to seek public input on the proposals 
that we understood Kaiser to be considering. 

Their response, as I recollect it, was that they 
were not authorized to seek public input, and therefore were not 
permitted to do so. If that's not direct quote, it's very close 
to my recollection of it. 

It is -- this moment now is the first we have 
known that the Commissioner would seek public input on this, 
which is obviously -- we believe Kaiser is contemplating closing 
literally every hospital in its system, which is obviously a 
massive redesign of the way Kaiser delivers care. 

SENATOR BRULTE: Mr. Bishop, your position is 
that the time to hold the hearing is when a specific proposal 
was made, not when there's speculation by a labor union as to 


what an HMO may or may not do? 

MR. BISHOP: Yes, Senator. 

SENATOR BRULTE: Is that inconsistent with what 
you just stated? 

MS. CAPELL: If I might. Senator Brulte, two 

First of all, this is not merely a labor 
organization. There are, as I mentioned, a large number of 
community groups. 

SENATOR BRULTE: Let me strike that part then. 

You stated that you think you know what Kaiser is 
doing, and I understand that you may be in a negotiation with 

Mr. Bishop's job is a little different. 

MS. CAPELL: I appreciate that. 

SENATOR BRULTE: I just want to be clear as to 
what the process is here. 

You're testifying that he should be holding a 

He is suggesting that he will when XYZ is done, 
and I'm just trying to make sure I understand what that XYZ is. 

MS. CAPELL: Well, that would be helpful to us as 
well . 

We are concerned, that is, in the plant closures 
of the early 1980s, we will literally show up one day to find 
closed facilities. 

CHAIRMAN LOCKYER: They can't do that, right, 
without a prior — 


MR. BISHOP: They cannot do that. 

MS. CAPELL: What's the notice process? 

MR. BISHOP: They have to file what is called a 
notice of material modification with the Department, and that is 
public filing. 

SENATOR BRULTE: Has Kaiser filed that? 


SENATOR BRULTE: When they file that, when will 
you hold your hearing, the next day, 30 days later? What's the 

MR. BISHOP: There is no policy, because I think 
until I became Commissioner, while there was the authority, 
public hearings were not held. 

I do want to clarify. I don't want to be unfair. 

In the response that came out in July, it did 
suggest that we did not have the authority. I disagree with 
that position. It came out, I think, after I'd been 
Commissioner three or four weeks. 

CHAIRMAN LOCKYER: You have people in your 
organization that keep sending letters that are not authorized. 
You've got to control the stamps, or something. 

MS. CAPELL: Sign your own letters. 

CHAIRMAN LOCKYER: You think you have that 

MR. BISHOP: I do have the authority. 

CHAIRMT^ LOCKYER: It's your intention to 
exercise it when you get the filing. 

MR. BISHOP: And I have exercised it in the past. 


and I intend to exercise it. 

CHAIRMAN LOCKYER: When is the last time you 

exercised it? 


MR. BISHOP: February and March, I guess. 



CHAIRMAN LOCKYER: Have you had any HMO file 
material change notices while you've been Commissioner? 

MR. BISHOP: Yes, I think we've had in the 
neighborhood of 20 to 30. 

CHAIRMAN LOCKYER: Have those provoked public 

MR. BISHOP: No, I don't think all of them rise 
to the level of public — public concern. 

Anybody can write to us and comment on those 
filings. They are public filings. If they do comment on them, 
we do look at those comments. 

CHAIRMAN LOCKYER: Has there been a public 
hearing in connection with any of those 20? 

MR. BISHOP: Well, the ones that we approved, the 
mergers, which was four sets of companies, two separate 
transactions . 


MS. CAPELL: Merely to note the material 
modifications are among 3 million documents, and that does 
require a degree of attentiveness to filings with the Department 
that places a substantial burden on any consumer group or union 


wishing to track this, that we track every material 

CHAIRMAN LOCKYER: I'd recommend that somebody 
look at the previous 20, because that should be something you 
can find, and see if any of them are substantial enough that you 
would have wished for some public hearing in a more formal 

MS. CAPELL: Thank you. 

Two additional points, if I might. Senator 
Rosenthal spoke to the quality of care efforts by Commissioner 
Bishop's predecessor. 

I would note that those quality of care efforts 
were less than satisfactory from our perspective. No 
representatives of labor were included, and consumer 
representatives were included very late in the process. 

CHAIRMAN LOCKYER: This was his predecessor? 

MS. CAPELL: Yes, and I will just — if these are 
to be -- we have not seen any efforts parallel to this in the 
past eleven months, but found those efforts, which were chaired 
by a physician from Kaiser, to be somewhat lacking in the fair, 
and impartial, and thoughtful approach that Mr. Bishop has been 
speaking to today. 

CHAIRMAN LOCKYER: Well, I might point out, just 
to advertise, that this task force that we've all appointed 
to -- the Governor, the Speaker, myself. The Rules Committee 
is the only group that's appointed any employee, but we're the 
only appointing authority of the three that's done that. 

MR. BISHOP: If I might, there is a statute which 


establishes a Health Care Advisory Committee for the 

Many of the positions are defined by statute very 
specifically. There are public members; there are vacancies. I 
have on numerous occasions solicited as publicly as I can people 
to submit their applications. 

CHAIRMAN LOCKYER: We're going to loan you Nancy 
Michel to help out, get some public members in there. 

MS. CAPELL: And it would certainly be a historic 
moment if a representative of the Service Employees 
International Union was appointed by Governor Wilson. 

CHAIRMAN LOCKYER: That would be historic. 

MS. CAPELL: Yes, we agree with that. 

SENATOR BRULTE: That's not the only word you 
could use. 

CHAIRMAN LOCKYER: Hysterical, historical. 

MS. CAPELL: With regard to the use of the Joint 
Commission on Accreditation of Health System, the Department of 
Health Services several years ago made a practice of surveying, 
shortly after JCHO had surveyed hospitals. 

The Department of Health Services Licensing 
Certification Division, which surveys hospitals on a routine 
basis, found that JCHO, which certified hospitals' eligibility 
for Medicare and Medi-Cal reimbursement under the federal 
government, routinely failed to assure that federal regulations 
were complied with. That is, that literally the day after the 
JCHO survey was done, hospitals were out of compliance with the 
federal regulations. 


CHAIRMAN LOCKYER: Is that what JCHO's supposed 
to do? 

MS. CAPELL: Yes, yes. 

And the Department of Health Services conveyed 
this information to the Health Care Financing Administration. 
This arose because there have been numerous attempts to 
eliminate the independent scrutiny by the Department of Health 
Services of hospitals in favor of using the Joint Commission on 
the Accreditation of Health Systems. 

This is something we have consistently opposed 
regarding the industry dominated. We were -- and we also note 
that the Wilson administration found that their surveys were 
error prone at best. 

CHAIRMAN LOCKYER: Ms. Capell, as I understood, 
and maybe I misunderstood, the purposes to which Mr. Bishop 
contracted with those groups, it was more sort of case 
assessment, I guess would be the description. That is, looking 
at whether the treatment was appropriate, and not whether the 
hospital — did I misunderstand? 

MR. BISHOP: Again, it's a joint contract with 
the IMQ. 

CHAIRMAN LOCKYER: What were they doing? 

MR. BISHOP: They do the on-site leg work. 

CHAIRMAN LOCKYER: It would be like accrediting a 
hospital, in effect. 

MR. BISHOP: They don't make the decisions. 

CHAIRMAN LOCKYER: But they look at the data. 

MR. BISHOP: The data. They go out and review 


patient charts, do the interviews, things like that. 

MS. CAPELLr I would merely suggest that within 
this very administration, there was substantial documentation 
that they did an inadequate job with that. 

CHAIRMAN LOCKYER: In what way were they 

MS. CAPELL: I apologize. It's been three or 
four years since I reviewed it. 

My recollection is that it related directly to 
quality of care issues because those -- that it arose around 
those issues in hospitals that — in the provision of safe care 
by physicians and nurses. 

SENATOR BRULTE: Would you suggest that there may 
be a growing concern over abuses within HMOs? Would that be an 
honest statement? 

MS. CAPELL: That would be fair, yes. 

SENATOR BRULTE: Are you suggesting that this 
agency may be a little bit slow to recognize that and react to 


SENATOR BRULTE: Would you also then, having 
looked at the record of the Legislature over the last three or 
four years, make the same charge against the Legislature? Three 
years ago, the Legislature showed a great deal of unwillingness 
in dealing with HMO abuses, and over the last year and this 
year, there is a growing understanding within the Legislature. 
There's a geometric increase of bills to deal with those abuses. 

MS. CAPELL: I would say that the Legislature is 


responding to its constituents in that regard, yes. 

CHAIRMAN LOCKYER: Certainly once the Pringle 
majority was broken up. Prior to that, no anti-HMO bill could 
ever get through the Assembly. 

MS. CAPELL: The Senate was, of course, always 
more — 

CHAIRMAN LOCKYER: Well, we had Rosenthal, who 
kept pumping them out. 

MS. CAPELL: And getting some of them through the 
Assembly, to our astonishment. 

SENATOR BRULTE: My sense is, because I think 
some of the points that your organization raises are legitimate, 
although clearly on the public hearing I think you may have a 
difference of opinion on what is the timeframe on that. 

It seems to me that there's a growing recognition 
of abuse, and maybe this agency, like the Legislature, is 
trailing in terms of dealing with it. 

But, you know, sometimes that's the way the 
system works. 

My sense is that this is an agency that is much 
more willing to look into this than it was three our four years 

MS. CAPELL: Part of the reason why we raise 
these concerns in every venue that is available to us is to 
assure that the enforcement is energetic. 

We've supported legislation with regard to 
managed care. The most constant question we get from our 
members, and I must also say in working directly with consumers 


iS/ why bother? It won't be enforced anyway. 

So, that skepticism is very pervasive. I think 
it is a — 

SENATOR BRULTE: That may not be a fair — I 
mean, your organization has certainly supported ballot 
initiatives that didn't get popular support in this state. 


SENATOR BRULTE: That doesn't mean they're wrong. 
It just means that maybe they're ahead of the timeframe. 

MS. CAPELL: I think maybe six months ahead or 
so, yes. 

CHAIRMAN LOCKYER: And $3 million. 

MS. CAPELL: That was my estimate, yes, sir. 

CHAIRMAN LOCKYER: Other comment? 

MS. WOODWORTH: Good evening Senators and poor 
suffering staff. It's almost 8:00 o'clock. I'll be brief. 

My name's Carla Woodworth. I'm the Executive 
Director for the California Physicianss Alliance. We represent 
physicians who are health policy analysts and advocates in 
California. We include academic researchers, private 
physicians, and physicians who work in large managed care 
organizations . 

The Department of Corporations in California has 
broad authority to protect the quality of care in managed care. 
But in this era of radical changes in health care, we see little 
or no effort by the Department of Corporations to improve and 
enhance its enforcement. 

For these reasons, we oppose the confirmation of 


Keith Bishop as Commissioner of Corporations. 

Thanks very much. 


Let me just jump in, because their letter is the 
strongest of all of the ones we've received, which, among other 
things, said, "What is going on in managed care today would not 
be permitted in academic research because the prohibitions on 
experimentation on human subjects would prevent it." 

Pretty strong commentary in their letter. 

MR. BISHOP: I have not seen their 


CHAIRMAN LOCKYER: I'll give you a bunch. 
Let me ask you to respond to one of the other 


Mr. Hebler, Mark Hebler, who you know, of course, 
as successful in suing HMOs, and I guess it might be the 
appropriate time to thank Senator Rosenthal publicly because, 
while he could have been appointed, that is, the Senator could 
have been appointed to the task force, he was willing to go on 
in an ex-officio role so that we could appoint Mr. Hebler, so- 
we'd have someone who had the kind of personal experiences he's 
had, and hope that that will contribute to a good result. 

He says in his letter, there have been all these 
cases, nearly 140 other cases that he's handled, with, of 
course, some knowledge of how HMOs are run as a result. "I have 
never once received a call from a member of the Department of 
Corporations requesting information about HMO regulation." 

Doesn't that seem shockingly deficient? 


MR. BISHOP: Well, I believe there has been 
contact. These cases — 

CHAIRMAN LOCKYER: That was March 26. 

MR. BISHOP: These cases occurred before I was 
the Commissioner. And I believe that there was contact between 
Mr. Hebler and the Department before I was the Commissioner. I 
believe my general counsel has, since I was Commissioner, 
informally invited Mr. Hebler to discuss his concerns. 

I know that, not with respect to Mr. Hebler 's 
cases, but there have been cases that have come up in public 
hearings and otherwise come to my attention. And I come back to 
the office and I say, "Do they have a complaints with us?" And 
we find out they don't. And I seek out those cases to find out 
what's going on. 

I do think that, as with many of the other 
industries we regulate, you know, civil enforcement is another 
way of redressing consumer problems. What we need is a 
balanced regulatory program that also gives consumers the right 
to pursue their actions on an individual basis. 

CHAIRMAN LOCKYER: Well, I hope his statement is 
inaccurate. You'll certainly see him at the meetings, if not on 
the end of a telephone. 

MR. BISHOP: I'll look forward to meeting him. 

CHAIRMAN LOCKYER: He's a pretty interesting guy. 
Actually, he appeared at the HMO conference they had most 
recently, and I heard back from plan managers that they were 
delighted to have him participate, that he was actually very 
helpful in saying, "If you do this, I can't sue. If you do 


that, I can." Kind of giving them some guidelines to observe 
with respect to consumer behaviors. 

Please, go ahead. 

MS. COOPER: Thank you. Senator. My name is 
Charlotte Cooper. I'll try to be very brief and respect your 

My name is Charla Cooper, and I am probably 
infertile. The experts give me less than one percent chance of 
ever having my own child. 

It didn't have to be this way. Kaiser made a 
mistake. And when we found out what happened, they steadfastly 
refused to refer me to an outside specialist who might be able 
to help me. 

I appealed to the DOC and Commissioner Bishop 
in July of 1996. They marked my case urgent, and responded to 
me seven months later. 

It's my understanding that state law requires 
answers to these RFAs within six weeks, not seven months. It 
was seven months that I waited, while my condition 

In February of this year, after Senator Rosenthal 
wrote the DOC, they then responded. They found Kaiser in 
violation of the Knox-Keene Act. Their wording is that there 
were delays in diagnosis and treatment. The Department has been 
unable to establish that these delays were in compliance with 
the Knox-Keene Act. So, I guess they don't actually say that 
there have been violations. They say that they're unable to 
find that they're in compliance. 



They also found that they were violating the 
Knox-Keene Act by failure to process a complaint. A Kaiser 
physician held my complaint in his office, basically hid it, 
instead of having it processed. 

CHAIRMAN LOCKYER: Who did? Kaiser? 


CHAIRMAN LOCKYER: I better give you Mr. Hebler's 
phone number. 

MS. COOPER: Medical malpractice attorney? I 
have an attorney. The damages are in now. 

CHAIRMAN LOCKYER: That's the only thing they 
sometimes respect, is when they get slammed. 

MS. COOPER: She may want to partner with 
someone; who knows. 

So, they found Kaiser in violation of the 
Knox-Keene Act, but the Department did nothing that I know of to 
punish Kaiser for these violations, and certainly nothing to 
help me. They could have. 

The Department is not enforcing the Knox-Keene 
Act. They're not doing their job. I'm only one of many. 

We have a health care crisis in California right 
now, and the DOC isn't enforcing legislation. 

I know it's a big job in response to Senator 
Lockyer's considered inquiry. I think it's huge. I think that 
the HMOs are absolutely running amok. There's a lot of pain out 
there, and there are people that have worse situations than I 
do, but it's a crisis. 

And I ask you, please, not to let this happen in 


our state, not to let this continue to happen. 

CHAIRMAN LOCKYER: Ms. Cooper, the problem is, we 
kind of bury all the correspondence, or at least a lot of it, in 
our file, so I've had a chance to go through those, as a case, 
to figure out what was going on here. 

MS. COOPER: Mine is one of many. I have a 
personal case, but obviously, this is much vaster than me. 
There's so many people like me. 

CHAIRMAN LOCKYER: I understand that. As 
somebody who's been a Kaiser member for 30 years, I worry about 
what kind of care I'd get if they didn't know I was a Senator. 

It's clearly getting worse and worse in the last 
few years, just from own staff, my neighbors, the friends I see. 
There is such deterioration in that system that I used just 
joke and call it, "the best of Soviet medicine." 

It's now worse than Soviet medicine, in my view. 

But who is Dale Redmond, CSU legal consultant? 

MR. BISHOP: Dale Raymond? She is an 
administrative law judge that we hired to help review 
complaints . 

Again, when I came on board, we had six medical 
consultants available to us, which is about the time her 
complaint came in. 

CHAIRMAN LOCKYER: How many do you have now? 

MR. BISHOP: We have around 50. We need more. 

CHAIRMAN LOCKYER: Ms. Raymond is the one who 
responded to Ms. Cooper. 

MR. BISHOP: She's an ALJ, but her case was also 



reviewed by a medical consultant, or a medical — a doctor. 

I have taken a personal interest in your case. 

MS. COOPER: Is there any particular reason it 
took seven months to respond to an urgent complaint? 

MR. BISHOP: We have been trying to beef up our 

When your complaint came in, we had a handful of 
medical consultants available to us. 

MS. COOPER: How many urgent complaints? 

MR. BISHOP: I don't recall. Your complaint, I 
met with Ms. Raymond on numerous occasions to discuss your case, 
your complaint. 


It's one of the kinds of complaints that makes me 
understand why this job is so important to people. 

CHAIRMAN LOCKYER: What does this mean, point 
seven? It's a letter to her, and I assume, since we have it, 
you don't mind it being discussed. 

MS. COOPER: Fine. 

CHAIRMAN LOCKYER: And I think maybe you 
misunderstood what I was saying earlier, that very often there's 
two ways to regulate corporate behavior: government oversight 
that tries, and it's almost always inadequate; and vigilante 
attorneys who sue them, which is often a better remedy. 

So, I'm recommending that to you. 

MS. COOPER: Right. I absolutely understand, and 
there will be a civil case. But the point is that now, we had 
to wait until the damages were in. 

CHAIRMAN LOCKYER: It's a medical problem, I 


understand that. 

But my point is, to fix the system, a lot of 
times only thing they respect is when they get hammered with 
punitive damages, and Kaiser deserves it. That's all I'm 

But Mr. Bishop, what does this mean: "Neither of 
your" her, "January 1996 complaint letters were referred to the 
health plan's customer member services department." 

Who did you write those letters to? 

MS. COOPER: I wrote them to Dr. Ira Golditch, 
who is the Chief of OB-GYN at Kaiser Permanente in San 

Dr. Golditch phoned me at home and told me that 
Kaiser wouldn't do anything. Rather than — it wasn't his 
decision -- rather than process the complaint. He kept the 
complaint in his office. He hid it instead of processing it, 
in direct violation of the Knox-Keene Act, which I only realized 

He led me to believe that his answer was a final 
one. It was not a final one. He was — he was obstructing the 

CHAIRMAN LOCKYER: What Raymond says is, they 
can't find any evidence of that, apparently. Do you know? 

MR. BISHOP: Could you read me — 

CHAIRMAN LOCKYER: Raymond says, "Neither of your 
'96 complaint letters were referred to the health plan's 
customer member services department. The Department," yours, 
"has been unable to establish that this inaction was in 


compliance with the Knox-Keene Act." 

It's sort of a triple reverse. 

MR. BISHOP: Yes, and what we're saying is — 

CHAIRMAN LOCKYER: Unable to establish that 
inaction was in compliance. 

MR. BISHOP: In other words, that the plan 
complied with the law. 

MS. COOPER: That's what they do, instead of fine 

CHAIRMAN LOCKYER: Is this Bulgarian translated 
into English? 

MR. BISHOP: This is — this was not the last 
word on this complaint. 

Now, I am sensitive to the rights of Ms. Cooper, 
and I don't want to jeopardize those — 

CHAIRMAN LOCKYER: But we're not talking about 
the medical history. 

MR. BISHOP: — but I can say that after not only 
meeting with Ms. Raymond during the course of the review, after 
there was response to it, I directed that this complaint be 
referred to our Enforcement. 

CHAIRMAN LOCKYER: Do they have it now? 

MR. BISHOP: They have it now. 

CHAIRMAN LOCKYER: Anything happen yet? 

MR. BISHOP: I would rather not say publicly. 

CHAIRMAN LOCKYER: Can you tell me if there's a 
result from referring it to your — 

MR. BISHOP: I have gotten advice in writing 


about their evaluation of the case from my Enforcement Division. 

MS. COOPER: Is there any ideas about what that 
advice is? 

MR. BISHOP: All our enforcement decisions are 
confidential as an enforcement agency. 

SENATOR BRULTE: That's by statute? 

MR. BISHOP: Yes, by statute. 

SENATOR BRULTE: Let me ask a couple questions. 

First of all, Ms. Cooper, I'm incredibly sorry 
you had to go through this. 

Let me also tell you, I don't go to HMOs because, 
it costs more to go someplace else, but there may be quality of 
care issues. 

What would you like to see happen to the 
physician? You suggested that there's not been a punishment 
yet. What do you think — 

MS. COOPER: There are two physicians involved in 
my case. 

All I wanted was referrals. I offered to sign-off 
on a medical malpractice claim if they would just get me to Dr. 
Mary Lake-Poland at Stanford University, who would try to take 
care of these things. 

What would I like to have happen to the 
physicians now? 

SENATOR BRULTE: Well, you had made the comment 
that you thought that there should be some kind of punishment, 
and I just want to be clear as to what you think the appropriate 
punishment — 



MS. COOPER: For my particular case? 

SENATOR BRULTE: Both Kaiser and the physician 
that sat — 

MS. COOPER: Well, that's difficult. They — 
obviously, they clearly violated the Knox-Keene Act. I mean, 
it's right here, basically, although they use, you know, this 
strange language saying that they're unable to find that they're 
in compliance. You know, they're violating the Knox-Keene Act. 

But my case is just one of so many where this is 
happening. I don't know that they should take any specific 
action on my case if they don't on other violations. 

The audit of Kaiser, which has been mentioned 
here, shows much more egregious systemic problems and violations 
of the Knox-Keene Act, and they've been there forever. 

And, you know, the Commissioner or the DOC told 
Kaiser in writing that they had until February of this year, and 
now it's August. 

Those violations are affecting hundreds if not 
thousands of people, you know. Maybe that's where the 
enforcement should be. 

Mine is just one example of what's going on. 

SENATOR BRULTE: That's why I specifically -- 

MS. COOPER: I don't know if I answered your 
question or not. 

I think something has to be done. I appreciate 
the fact that the Senate is doing, you know, is involved in this 
extensive legislation, and I think that we all appreciate that. 

But I also think that the Knox-Keene Act is there 


for a reason, and these HMOs are just -- they're way, way, way 
out of control. 

SENATOR BRULTE: Maybe I could then direct the 
question to Mr. Bishop, without going into attorney-client, or 
going through any privacy issues here, you have a specific 
complaint. What would the range of action against Kaiser be? 
What could the range of action against Kaiser be if they were 
found to have been the proximate cause of the sterility? 

MR. BISHOP: We can take a wide range of 
actions. We can fine the plan. We can freeze enrollment on 
the plan. We can issue administrative cease and desist orders. 
We can go to court and get a civil injunction. We can go to 
court, as we did with Western Dental, and ask that a receiver or 
a monitor be appointed over the plan. 

So, there's a wide range of kinds of steps that 
we can take to see that the Knox-Keene Act is enforced. 

SENATOR BRULTE: Do you take it against the plan 
or the physician or both. 

MR. BISHOP: That's a point I want to make clear. 
We do not license physicians. We license the plan, so our 
action would be against the plan. 

CHAIRMAN LOCKYER: Have you concluded whatever 
review in your Enforcement Unit would be expected pursuant to 
this complaint? 

MR. BISHOP: A number — a complaint, if it gets 
referred to Enforcement, a decision could be made to take action 
on that individual complaint, or it may become the basis, if we 
see a lot of — 



SENATOR BRULTE: You look for the pattern — 

MR. BISHOP: — and then it becomes, you know, 
where we can say, there's a pattern in practice here. Of 
course, that becomes a much more compelling case for broader 
remedies, like a receivership, or a monitor, or a freeze on new 

CHAIRMAN LOCKYER: Have you closed the file with 
respect to Ms. Cooper? 


MS. COOPER: This says it's closed. Your 
response to me said it was closed, and I wrote you a very 
lengthy letter a month ago, which I have no response from at 

CHAIRMAN LOCKYER: Ms. Cooper, which response? I 
don't think we have that correspondence. What date? 

MS. COOPER: It's dated February 14th, right 
after Senator Rosenthal wrote them. 

CHAIRMAN LOCKYER: This is the Dale Redmond 

MS. COOPER: Yes, it is the Dale Redmond letter. 
And it says, "Therefore, your RFA will be closed." 

I wrote a very extensive letter, which I just 
gave to you. Senator. 

CHAIRMAN LOCKYER: But it does say in that 
letter, your RFA may be referred to the regulatory or 
enforcement staff for further review, which is what's happened, 



CHAIRMAN LOCKYER: So, what I hear is, this isn't 
closed, Ms. Cooper. 

MS. COOPER: Well, you can see that it's rather 
ambiguous . 

CHAIRMAN LOCKYER: There's some reason not to be 
more publicly explicit about what enforcement possibilities 
there are here? 

I don't know if you can talk to her on her own, 
but to give her some clarification about the future. 

MR. BISHOP: Unfortunately, and I understand 
this, the process is not nearly — 

CHAIRMAN LOCKYER: It's not closed. 

MR. BISHOP: — closed, and it's not — when it 
goes over to the enforcement side, it's not as public as one 
would hope. But I think there are good public policy reasons 
for that. 

SENATOR BRULTE: Is that statutorily driven? 


SENATOR BRULTE: So, the reason that it's private 
is because the Legislature — 


CHAIRMAN LOCKYER: Well, and the United States 
Supreme Court, a privacy act. 

MS. COOPER: So, there's some possibility that 
there might, in fact, be some action, but certainly no 

CHAIRMAN LOCKYER: The Government Code Section 
62.24(f) keeps the documents private. 



SENATOR HUGHES: Has this been going on? I've 
been looking through various chronologies and statements. Has 
this been going on since '94? 

MS. COOPER: Well, it depends on how you want to 
date it. In terms of when I first complained, or when I first 
presented, or you know. 

I mean, there was a combination between the 
physician. Dr. Golditch, holding a formal complaint in his 
office in direct violation of the Knox-Keene Act for over six 
months, and then the DOC taking seven months. There was over a 
year of, as far as I can see, illegal delay in this case, and an 
illegal delay which I couldn't afford. 

CHAIRMAN LOCKYER: Ms. Cooper, was this at the 
San Francisco Kaiser? 


SENATOR HUGHES: From I what I have here, it's 
been going on since December of '94? 

MS. COOPER: Yes, if you want to date it, yes. 
The whole chronology, yes. 

SENATOR HUGHES: All right, thank you. 

CHAIRMAN LOCKYER: Thank you, Ms. Cooper. I know 
it's difficult to come up and talk about these things. 

MS. COOPER: Well, it is. 

I hope that you continue not only to work in 
terms of bills, but also in terms of the Knox-Keene Act. 

I understand your concerns with the fact that 
this may be an overwhelming job, and a very difficult job. I 
believe it is. And I think that that's a function of what's 


going on in the market place. 

But I think that something has to be done quite 

SENATOR BRULTE: Can I ask one last question? 

We have an appointee candidate before us who says 
that when he came on board/ there was six reviewers. And 
because he saw a need, he has almost increased that by, what is 
that, a thousand percent? From six to fifty? Sixty would be a 
thousand percent. 

MS. COOPER: I have heard quite a bit of 
testimony here that, quite honestly, as an ordinary citizen, I 
find shocking. 

This was an urgent complaint. It was marked 
urgent. There was a reason that it was marked urgent. 

CHAIRMAN LOCKYER: Who marks them, the consumer? 

MS. COOPER: No, the DOC. 

CHAIRMAN LOCKYER: They decide urgent or not? 


SENATOR BRULTE: Mr. Bishop, did you have a 
backlog when you became — 

CHAIRMAN LOCKYER: Let us know how many urgents 
you have . 

SENATOR BRULTE: Did you have a backlog of 
complaints? I mean, you obviously found a compelling reason to 
take a staff from — 

MR. BISHOP: We had a huge backlog, and we've cut 
it by more than 70 percent. And I still don't think that's good 
enough, but we made a lot of progress in the time I've been 



1 here. 

2 MS. COOPER: But there's very few urgent 

3 complaints, at least that's my understanding. 

4 CHAIRMAN LOCKYER: Let's find that out, how many 

5 there are, so we'll at least know, and whether the process of 

6 designating urgent or not is adequate. 

7 Thank you. 

8 MS. COOPER: Sure, thank you. Senators. 

9 CHAIRMAN LOCKYER: Other comment? 

10 MS. GODFREY: Thank you. My name is Jo Joshua 

11 Godfrey, and I am glad that I have the opportunity tc conie here 

12 today to tell you about my experiences with this department. 

13 When I filed my complaint in October of '94, I 

14 was ignored by the Department of Corpcratior.s . It took several 

15 months and many complaints before the Deparzr^r.z ever began to 

16 investigate what my health plan had done. 

17 I find it inconceivable that this Department's 

18 complaint form said if I had any legal representation, then no 

19 investigative action could be taken. 

20 Finally, after about a year and a half, and 

21 pushing and pulling, I received a letter from the Department of 

22 Corporations that said they couldn't share the outcome of their 

23 investigation with me because it was confidential. And that 

24 while they would monitor my health plan, they were closing my 

25 case. 

26 I am here to urge that the Senate not reconfirm 

27 Mr. Keith Bishop's appointment as head of the Department of 

28 Corporations. It is my personal experience with this Department 


that has brought me to this point, a point in which I have 
personally witnessed the Department fail in its regulatory 
function of overseeing HMOs. 

Had they done their job properly, and in 
accordance with the proscribed charter for the Department of 
Corporations, many persons abused by the HMO system, myself and 
my family included, would not be victims today. I would be 
living a normal life instead of spending it trying to fix a 
system that has totally failed, hoping and praying that there 
could be accountability and justice for my family and for every 
family who will be saved and not have to experience this pain. 

Over the past four years, my family and I have 
been subjected to what amounts to a never-ending nightmare as 
perpetrated by Signa Health Plans of California, our HMO. While 
we fought to get medical treatment we paid our insurer for, we 
were lied to by them about our health conditions. They tried 
their best not to treat us. And when we finally caught them, 
after years of suffering, they tried to forge our medical 
records to cover their conduct, and conspired with other health 
care providers to help them cover up. 

However, in their haste, they placed the tumor in 
the wrong lung, on the wrong lobe. They covered up the fact, 
and tried to persuade me that I was well, when all the time it 
should have been evident that I had a tumor in my left lung. 

Then after the tumor's removal, they tried their 
best to persuade me it was benign, to not have to pay for 
appropriate follow-up treatment of a malignant tumor. 

They failed to inform my husband that he had a 



pulmonary nodule in his lung that has been present for some 19 
months and did not provide the appropriate treatment. His 
prognosis, we have been told, is not very good at all. 

I recently sought assistance from the Attorney 
General's office, only to learn that the case the Department 
kept writing to me about was a nonexistent file, when the 
Attorney General's office inquired about it. 

It was stated the Attorney General has wanted to 
prosecute HMO cases in the past, but the Department of 
Corporations would not authorize the prosecution. 

The Attorney General's office said it could not 
act without the Department's authorization. 

I presented my findings to my State Senator, and 
he helped me author language to try to change the law. 

I find it totally inconceivable that this 
do-nothing department has been permitted to continue as a 
regulatory arm of the state for as long as it has. In fact, on 
Good Friday, I finally had an admission from them that what 
happened to our family was so egregious that the case was 
referred to the Enforcement Division for some kind of action. 

I was told that the Department found a problem 
with Signa's license, and so they ended its operation of its 19 
Southern California clinics. 

I believe a deal was made with Signa, and they 
got to pretend they were selling these clinics, when in fact it 
sold them back to the same persons who had previously owned 
them, except they were operating under a different name. 

They still operate with the same providers, doing 


the same things they always did. 

CHAIRMAN LOCKYER: I'm sorry, but what's the 
chain of clinics? 

MS. GODFREY: Signa. 

CHAIRMAN LOCKYER: Are they subcontracting? I 
missed how it changed hands. 

MS. GODFREY: They sold them to a company called 
Friendly Hills. That was the one in the newspaper that had the 
$10.9 million fine for killing a 30-year-old woman. 

I was also informed that my case has now moved 
from the Enforcement Division all the way to the front office, 
whatever that means. 

CHAIRMAN LOCKYER: You say it has been? 

MS. GODFREY: That's what they said. 

What happened, what about all the other HMOs that 
have made news headlines abusing the innocent? What happened to 
Signa was no deterrent. I know; I have fought the fight. 

This is a shameful situation. I was abused by 
my HMO, lied to, and abused again by their insurance company. 
Farmers Insurance, and finally became a victim of a legal system 
that makes it so costly and almost impossible for any victim to 
seek retribution against them. 

It is a sad state of affairs that this 
victimization has no end in sight. It is precisely this, the 
victimization of the innocent, that is driving the need for a 
cure. No more bandaids. 

Let's face it. This has been a nonregulated 
industry, and my family's story is only a portrait of this 



injustice. While it will be impossible to ever repair or repay 
what has been stolen from us — our dignity/ our business, years 
of our lives, scarring that our children will never fully 
recover from — we are crying out to you now. 

Justice and accountability to ensure that nothing 
like this could ever happen again will be the beginning of 
helping us and countless victims and their families start to 
rebuild their lives, safe in the knowledge of knowing that 
millions of innocent families will be spared and give meaning to 
this long, lonely road that we have been forced to walk. 

Therefore, I urge you to oppose Mr. Bishop's 
confirmation. Thank you. 

CHAIRMAN LOCKYER: Is it Godfrey? Is that right. 


CHAIRMAN LOCKYER: Thank you, Ms. Godfrey. 

MS. GODFREY: Thank you. 

CHAIRMAN LOCKYER: Are you familiar with this 
case? Can you bring us up to date on it at all? 

MR. BISHOP: I am generally familiar with it, but 
again, I think it's very difficult because I am conscious of the 
rights of — not only the privacy rights, but any legal rights 
that these complainants may have that may be jeopardized in 
terms of discussing them in this kind of forum. 

This is a case that does go back many, many 

SENATOR BRULTE: I have two questions of 
Mr. Bishop. 

Following up the two statements the previous 


witnesses made/ does the Attorney General need to check with you 
before he makes a prosecution. 

MR. BISHOP: Well, by statute, the Department of 
Corporations, unlike many departments in state government, 
represents itself in civil actions. So, most state agencies are 
represented by the Attorney General. When they want to go into 
trial court, it's the Attorney General who represents them. 

The Legislature has granted us the authority to 
represent ourselves, and our lawyers in the Enforcement Division 
represent us in court. 

So, I'm not really aware of the Attorney General, 
since we've been doing it, becoming involved in the enforcement. 

SENATOR BRULTE: And the second question, the 
witness alluded to the fact that she had received communication 
from DOC that if there was legal action pending, your hands were 


MR. BISHOP: I'm not sure. 

This goes back, like, four years. 

SENATOR BRULTE: I understand. This is 1994, 
long before you got there. 

MR. BISHOP: I'm really not sure. 

CHAIRMAN LOCKYER: What's the current complaint 
form say? Have you looked at it? 

MR. BISHOP: The current complaint form? It 
doesn't say that. 

MS. GODFREY: Consumers Union went to Los Angeles 
and met with the Department — 


CHAIRMAN LOCKYER: But you said there's a form — 

MS. GODFREY: The one that they gave me, the 
Department of Corporations. 


MS. GODFREY: I have it with me. 

SENATOR BRULTE: I'd like to see it. That would 
be very helpful. 


MR. BISHOP: But in my view, the fact that a 
civil action or arbitration proceeding is pending would not 
deprive us of jurisdiction to take the complaint. 

CHAIRMAN LOCKYER: I wouldn't think so. 

MR. BISHOP: I can't speak for what was the case 
a few years ago. 

SENATOR HUGHES: It also seems to me significant 
that both of these cases were in 1994. Whoever was on the watch 
then — 

CHAIRMAN LOCKYER: I thought Ms. Cooper was more 

SENATOR HUGHES: No, she started in 1994. That's 
the first piece of paper I saw from her in our packet. 

CHAIRMAN LOCKYER: Go ahead and look for the 
form, and we'll take some more comment. 

MS. GRIFFIN: Mr. Chairman, Members of the 
Committee, Mary Griffin, representing the American Medical Group 
Association, and in the interest of time, I'm going to keep this 
very short. 

I want to make sure, because I know they got 


their letter in very late, that you know we do support Mr. 
Bishop's confirmation. 

Let me tell you, we don't always agree with the 
Department. We are providers/ and we are going to have some 

But what I wanted to do is point out the fact 
that the openness of the Department has been something we do 
appreciate. I call there and try to get some answers from time 
to time. I'm able to get those answers. I'm able to sit down 
and meet with those people at the highest levels. So, I really 
appreciate that openness, and it is appreciated by the members 
of my organization. 

So, in that vein, I would certainly support the 
Commissioner being appointed. 

Thank you. 

SENATOR BRULTE: Mary, I just want to ask you a 
question as somebody who's followed this. You've been lobbying 
for medical — 

MS. GRIFFIN: Just a couple of years. 

SENATOR BRULTE: I don't want to go there. 

Clearly, anyone who's even a casual observer 
knows that this is an agency that has had not an aggressive 

For those of us who don't spend all our time on 
medical issues, is Mr. Bishop and the changes he's bringing in 
the relatively short time he's been there, is he taking the 
enforcement and the administrative process in the right 
direction, or is he taking it in the wrong direction? 



MS. GRIFFIN: I think very clearly from our 
perspective, he is taking it in the right direction. 

Let me comment, though, that I don't think we 
think, or anybody in this Committee thinks it's perfect. 

I was watching. I may not have been sitting 
here, but I've been watching all the hearing. And I couldn't 
agree more with what Steve Thompson said and the Chair alluded 
to, they could certainly use some additional help over there. 

So, anything anybody in this Committee can do to 
get the Section 28 approved would be helpful. 

CHAIRMAN LOCKYER: That's the imaging request. 

I wanted to ask, and now's a good time to do it, 
Mr. Bishop, have you asked Finance for enforcement budget 

MR. BISHOP: I think the one issue, maybe the 
only issue in this whole area in which I think everyone would 
agree is the need for additional resources. And I agree with 

And I am studying closely and putting together a 
plan that will bring additional resources, not only to 
enforcement, but to our surveying process, and to our consumer 
complaint process. It's the one area that people do agree on. 

CHAIRMAN LOCKYER: Mr. Bishop, I'm going to 
suggest to the Governor that, not the reinventing the wheel of 
the whole complaint process and so on that may take more time, 
but it's obvious from all the commentary that the current 
enforcement budget is inadequate. And that needs to be 
addressed before May 22nd. 


MR. BISHOP: I'm aware of that. 

CHAIRMAN LOCKYER: In some way. You have people 
that have to agree to that. 

SENATOR BRULTE: They may be listening in. 

CHAIRMAN LOCKYER: The Governor's Office. 

But I'll tell you, getting a confirmation' for you 
out of the Senate will be one of the harder tasks I've had. And 
it's not because you haven't been forthcoming, and open, and 
clearly committed to managing and creating a better culture in 
this Department, and one that has greater respect for consumer 
needs, but there are so many controversies associated with 

I think unless there's active enforcement 
augmentations, they're going to shoot the messenger. I don't 
want to do that, so we've got to push them and try to see what 
we can do, short of the whole redesign that may take a longer 

This is the form. Have you seen it? On the 
form, basically it says, "The Department cannot intervene in 
this complaint if I'm represented by counsel or if litigation is 
pending. " 

You might check to see if the same one is still 
being used. 

MS. GODFREY: I would like to say that because of 
this form, I went unrepresented, believing that something would 
happen to the health plan. I had to file my own complaints in 
court. Then, it is just like a nightmare. The whole thing's 
like a nightmare. 



SENATOR BRULTE: It's the top paragraph. 

CHAIRMAN LOCKYER: Right at the top of that page 
that was open there. The paragraph says mostly correctly what 
the Department can and can't do. It's the last sentence or two 
that's the problem. 

Could you let us know if that's been deleted from 
the information you give to people now? 

MR. BISHOP: Okay. It's not our policy. 

CHAIRMAN LOCKYER: Let's check the form just so 
we know. Thank you. 

MS. GODFREY: One other thing I'd like to say. 

CHAIRMAN LOCKYER:" You'd better come up to the 
mike if you want to add something. 

MS. GODFREY: Also, this health plan, the things 
it has done to my family since, is like unbelieveable. And I 
think that I have enough evidence that, if somebody looks at it, 
they'll be able to see the truth. 

Plus, I have tape recorded conversations at the 
height of the abuses. It wouldn't talk with this health plan 
unless they let me tape record the conversations, and I have 

Thank you. 


Is there anyone else that wishes to comment. 

Are there further questions from Members. 

SENATOR HUGHES: Is that form dated? 

CHAIRMAN LOCKYER: It's 9 of '94. 

SENATOR HUGHES: Do you change the form yearly? 


MR. BISHOP: It's not on a regular basis. It's 
not like we do it on a regular — at least to my knowledge, that 
we do it on some periodic basis. 

SENATOR HUGHES: Is it conceivable that this form 
could have been used just the day before you got to your job? 


SENATOR HUGHES: And might still be used by some 
in your operation. How do you control it? 

MR. BISHOP: I hope not. 

SENATOR HUGHES: How do you control it? How do 
you know? 

MR. BISHOP: Well, I've had discussions with my 
staff about it in the past, about our policy with respect to 
whether or not a pending action would preclude our taking action 
on an RFA. 

SENATOR HUGHES: Most agencies date their forms 
and revise them. Do you date and revise your forms in the 

MR. BISHOP: Off-hand, I couldn't tell you 
whether we do that. We have a lot of forms, and whether it's 
done on all our forms, I don't know. 

SENATOR HUGHES: Are you going to find out? 
Wouldn't you be curious? 

MR. BISHOP: I will find out. I am curious now. 
I will find out. 

CHAIRMAN LOCKYER: Let me ask about the policy. 
A request for assistance comes into you. I 
understand your diligence about respecting the law that makes 


those documents confidential that are accumulated pursuant to 
the RFA. 

Is there some reason why they shouldn't be 
accessible to the complaining party? Isn't the confidentiality 
rule meant to protect them from undue public exposure? 

MR. BISHOP: Well, I think there's that. • 

I think there's also, you know, we don't always 
find that the plan is in violation. Maybe we want to pursue a 
separate civil action, and frankly, our findings may hurt or 
help them, and we don't want to prejudice their rights in that 

CHAIRMAN LOCKYER: I'm not sure that your 
providing them to the client would bring any prejudice on their 
civil action. 

MR. BISHOP: Well, if we found that the plan had 
complied with the law, I think if I were the defendant's 
counsel, I would be pretty happy to have a finding by the 
regulator of the plan that there had not been a violation. 

SENATOR BRULTE: Let me just go back to that. 

I thought you had stated before that that's hot a 
decision of the agency. This is statute, and you mentioned 
Supreme Court. 

CHAIRMAN LOCKYER: Well, it's both, but there's a 
statutory provision that closes these records. 

MR. BISHOP: That's with respect to the 
enforcement records, yes. 

And we also would end up testifying, I think, in 
a large number of cases if we were not immunized from being 


called in, because we would be, I think, attractive expert 
witnesses . 

CHAIRMAN LOCKYER: We may need to think about 

SENATOR BRULTE: To the extent that we're 
disadvantaging people because of that privacy issue, you have no 
control over that; do you? 


SENATOR BRULTE: If it's statutory, last time I 
checked, you don't have a vote around here. 

CHAIRMAN LOCKYER: They're prohibited by the law 
from releasing those records, and it's various points you've 
heard about how it may or may not help or hurt someone to make 
records public. 

Okay, did you want to add anything? You're 
entitled to the condemned' s last request or summation, whatever 
you want to call it, Mr. Bishop. 

What I think we'll do is not vote tonight. Leave 
the record open. We still have 16 days, but leave the record 
open so that if there's other people that are provoked to 
comment because they watched it on Cal Span or something, we'll 
have the benefit of any further comment and an opportunity to 
talk with the administration some about these issues. 

But I want to make sure you have chance to 
conclude if you have anything that you'd wish to add. 

MR. BISHOP: Given the lateness of the hour, I'd 
just like to let everybody go home. 

CHAIRMAN LOCKYER: Probably a prudent way to 


conclude. Thank you very much. 

MR. BISHOP: Thank you. 

CHAIRMAN LOCKYER: I would expect this to be on 
next Monday's agenda. 

SENATOR BRULTE: Senator, consistent with what we 
did with Mr. Alarcon, is it your intent that we're not going to 
take any more public hearing, and they can just add to the 
record in writing? 

CHAIRMAN LOCKYER: Well, actually with 
Mr. Alarcon there were a couple who did come that wanted to make 
a public comment and did. We try to keep that to a minimum, if 
we can. It just depends on what comes up. 

Thanks, Mr. Bishop. 

MR. BISHOP: Thank you. 

[Thereupon. This portion of the 

Senate Rules Committee hearing was 

terminated at approximately 8:30 P.M.] 
— ooOoo — 



I, EVELYN J. MIZAK, a Shorthand Reporter of the State 
of California, do hereby certify: 

That I am a disinterested person herein; that the 
foregoing transcript of the Senate Rules Committee hearing was 
reported verbatim in shorthand by me, Evelyn J. Mizak, and 
thereafter transcribed into typewriting. 

I further certify that I am not of counsel or 
attorney for any of the parties to said hearing, nor in any way 
interested in the outcome of said hearing. 

^ IN WITNESS WHEREOF, I have hereunto set my hand this 

, 1997. 

Shorthand Reporter 


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